PROSPECTUS
Aega ASA (A Norwegian public limited liability company incorporated under the laws of Norway)
Listing on Oslo Axess of 4,991,184 new shares in Aega ASA issued in connection with a completed private placement of shares at a subscription price of NOK 3.00 per share directed towards existing shareholders and Norwegian and international investors.
Listing on Oslo Axess of 3,000,000 new shares in Aega ASA with a subscription price of NOK 3.00 per share issued as consideration in connection with a purchase of certain assets from Solex AS (previously named Aega Solar AS).
This prospectus (the "Prospectus") has been prepared in connection with the listing (the "Listing") on Oslo Axess, a regulated market place operated by Oslo Børs ASA (the "Oslo Stock Exchange") by Aega ASA, a public limited liability company incorporated under the laws of Norway, ("Aega" or the "Company" and, together with its consolidated subsidiaries, the "Group") of (i) 4,991,184 new shares in the Company, each with a nominal value of NOK 1.00, (the "Private Placement Shares") issued in a private placement directed towards the Company’s existing shareholders, Norwegian and international institutional investors completed on 19 December 2016 (the "Private Placement") at a subscription price of NOK 3.00 per Private Placement Share, and (ii) 3,000,000 new shares in the Company, each with a nominal value of NOK 1.00 (the "Consideration Shares" and, together with the Private Placement Shares, the "New Shares") issued to Solex AS ("Solex") at a subscription price of NOK 3.00 per Consideration Share as consideration for assets acquired by the Company from Solex pursuant to an asset purchase agreement dated 9 December 2016 (the "Solex Transaction").
This Prospectus does not constitute an offer to buy, subscribe or sell the securities described herein. The Prospectus serves as a listing prospectus as required by applicable laws and no securities are being offered or sold pursuant to this Prospectus.
The Company’s existing shares (the "Shares") (other than the New Shares) are, and the New Shares will be, listed on Oslo Axess under the ticker code "AEGA".
All of the Shares, including the New Shares, are registered in the Norwegian Central Securities Depository ("Verdipapirsentralen" or the "VPS") and are in book-entry form. All of the Shares, including the New Shares, rank pari passu with one another and each carry one vote. Except where the context otherwise requires, reference in this Prospectus to the Shares will be deemed to include the New Shares.
Investing in the Shares, including the New Shares, involves a high degree of risk. See Section 2 "Risk factors".
29 March 2017
Managers
SpareBank 1 Markets AS and Pioner Kapital AS
IMPORTANT INFORMATION
This Prospectus has been prepared in connection with the listing of the New Shares issued in connection with the Private Placement and the Solex Transaction, and in order to provide information about the Group and its business.
The Group has furnished the information in this Prospectus. This Prospectus has been prepared to comply with the Norwegian Securities Trading Act of 29 June 2007 no. 75 (the "Norwegian Securities Trading Act") and related secondary legislation, including the Commission Regulation (EC) no. 809/2004 implementing Directive 2003/71/EC of the European Parliament and of the Council of 4 November 2003 regarding information contained in prospectuses, as amended, and as implemented in Norway (the "EU Prospectus Directive"). This Prospectus has been prepared solely in the English language. The Financial Supervisory Authority of Norway (Nw.: Finanstilsynet) (the "Norwegian FSA") has reviewed and approved this Prospectus on 29 March 2017 in accordance with Sections 7-7 and 7-8 of the Norwegian Securities Trading Act. The Norwegian FSA has not controlled or approved the accuracy or completeness of the information included in the Prospectus. The approval by the Norwegian FSA only relates to the information included in accordance with pre-defined disclosure requirements. The Norwegian FSA has not made any form of control or approval relating to corporate matters described in or referred to in the Prospectus.
For definitions of certain other terms used throughout this Prospectus, see Section 18 "Definitions and glossary".
The information contained herein is current as of the date hereof and subject to change, completion and amendment without notice. In accordance with Section 7-15 of the Norwegian Securities Trading Act, significant new factors, material mistakes or inaccuracies relating to the information included in this Prospectus, which are capable of affecting the assessment of the New Shares between the time of approval of this Prospectus by the Norwegian FSA and the Listing of the New Shares on Oslo Axess, will be included in a supplement to this Prospectus. The delivery of the Prospectus at any date after the date hereof, shall not under any circumstances imply that there has been no change in the Group’s affairs or that the information herein is correct as of any date subsequent to the date of this Prospectus.
No person is authorised to give information or to make any representation concerning the Group or in connection with the Private Placement, the Solex Transaction or the New Shares other than as contained in this Prospectus. If any such information is given or made, it must not be relied upon as having been authorised by the Company or by SpareBank 1 Markets or Pioner Kapital AS (jointly the "Managers") or by any of their affiliates, representatives or advisors.
The distribution of this Prospectus may in certain jurisdictions be restricted by law. This Prospectus does not constitute an offer of, or an invitation to purchase, subscribe or sell, any of the securities described herein. Neither this Prospectus nor any advertisement or any other offering material may be distributed or published in any jurisdiction except under circumstances that will result in compliance with applicable laws and regulations. Persons into whose possession this Prospectus may come are required to inform themselves about, and to observe, any such restrictions. In addition, the Shares are subject to restrictions on transferability and resale and may not be transferred or resold except as permitted under applicable securities laws and regulations. Persons in possession of this Prospectus are required to inform themselves about and to observe any such restrictions.
In making an investment decision, prospective investors must rely on their own examination, and analysis of, and enquiry into the Group, including the merits and risks involved. Neither the Company, nor any of its representatives or advisers, are making any representation to any offeree or purchaser of the Shares regarding the legality of an investment in the Shares by such offeree or purchaser under the laws applicable to such offeree or purchaser. Each reader of this Prospectus should consult with his or her advisors as to the legal, tax, business financial and related aspects of a purchase of the Shares.
All Sections of the Prospectus should be read in context with the information included in Section 4 "General information”.
This Prospectus, the Private Placement and the Listing shall be governed by and construed in accordance with Norwegian law. The courts of Norway, with Oslo as legal venue, shall have exclusive jurisdiction to settle any dispute which may arise out of or in connection with the Private Placement, the Listing or this Prospectus.
Investing in the Shares involves a high degree of risk. See Section 2 "Risk factors".
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TABLE OF CONTENTS
1 SUMMARY ...... 6 2 RISK FACTORS ...... 15 2.1 RISKS RELATED TO THE GROUP’S BUSINESS AND INDUSTRY ...... 15 2.2 RISKS RELATED TO THE SOLEX TRANSACTION ...... 19 2.3 RISKS RELATING TO THE SHARES ...... 19 3 RESPONSIBILITY FOR THE PROSPECTUS ...... 22 4 GENERAL INFORMATION ...... 23 4.1 OTHER IMPORTANT INVESTOR INFORMATION ...... 23 4.2 PRESENTATION OF FINANCIAL AND OTHER INFORMATION ...... 23 4.3 CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS ...... 24 5 DIVIDEND POLICY ...... 26 5.1 DIVIDEND POLICY ...... 26 5.2 DISTRIBUTED DIVIDENDS ...... 26 5.3 LEGAL CONSTRAINTS ON THE DISTRIBUTION OF DIVIDENDS ...... 26 5.4 MANNER OF DIVIDEND PAYMENTS ...... 27 6 INDUSTRY AND MARKET OVERVIEW ...... 28 6.1 INTRODUCTION ...... 28 6.2 GENERAL ...... 28 6.3 MARKET INFORMATION SPECIFIC FOR THE COMPANY’S INVESTMENTS...... 30 6.4 COMPETITION ...... 30 7 BUSINESS OF THE GROUP ...... 32 7.1 INTRODUCTION ...... 32 7.2 HISTORY AND DEVELOPMENT OF THE GROUP ...... 32 7.3 THE ACQUISITION OF PIANO MOLINO S.R.L...... 32 7.4 BUSINESS OF THE GROUP ...... 33 7.5 MATERIAL CONTRACTS ...... 35 7.6 ENVIRONMENT ...... 36 7.7 LEGAL PROCEEDINGS ...... 36 7.8 DEPENDENCY ON CONTRACTS, PATENTS, LICENSES ETC...... 36 7.9 PRINCIPAL INVESTMENTS ...... 36 8 CAPITALISATION AND INDEBTEDNESS ...... 38 8.1 CAPITALISATION AND INDEBTEDNESS ...... 38 8.2 WORKING CAPITAL STATEMENT ...... 40 8.3 CONTINGENT INDEBTEDNESS ...... 40 9 SELECTED FINANCIAL AND OTHER INFORMATION ...... 41 9.1 STATEMENT OF INCOME ...... 41 9.2 STATEMENT OF FINANCIAL POSITION ...... 45 9.3 STATEMENT OF CASH FLOW ...... 48 9.4 STATEMENT OF CHANGES IN EQUITY ...... 50 9.5 CASH FLOW INFORMATION ...... 51 9.6 OFF-BALANCE SHEET ARRANGEMENTS ...... 52 9.7 TREND INFORMATION...... 52 9.8 SIGNIFICANT CHANGES ...... 52 9.9 AUDITOR ...... 52 10 BOARD OF DIRECTORS, MANAGEMENT, EMPLOYEES AND CORPORATE GOVERNANCE ...... 53 10.1 INTRODUCTION ...... 53 10.2 BOARD OF DIRECTORS ...... 53 10.3 MANAGEMENT ...... 55 10.4 REMUNERATION AND BENEFITS ...... 56 10.5 PENSIONS AND RETIREMENT BENEFITS ...... 57 10.6 EMPLOYEES ...... 57 10.7 CORPORATE GOVERNANCE ...... 57 10.8 CONFLICTS OF INTERESTS ETC...... 58 10.9 FRAUDULENT OFFENCE, BANKRUPTCY, INCRIMINATION AND DISQUALIFICATION ...... 58 3
11 RELATED PARTY TRANSACTIONS ...... 59 12 CORPORATE INFORMATION AND DESCRIPTION OF SHARE CAPITAL ...... 60 12.1 COMPANY CORPORATE INFORMATION ...... 60 12.2 LEGAL STRUCTURE ...... 60 12.3 TRADING ON STOCK EXCHANGE ...... 60 12.4 SHARE CAPITAL AND SHARE CAPITAL HISTORY ...... 61 12.5 OWNERSHIP STRUCTURE ...... 61 12.6 AUTHORISATION TO INCREASE THE SHARE CAPITAL AND TO ISSUE SHARES ...... 62 12.7 AUTHORISATION TO ACQUIRE TREASURY SHARES ...... 62 12.8 OTHER FINANCIAL INSTRUMENTS ...... 62 12.9 SHAREHOLDER RIGHTS ...... 63 12.10 THE ARTICLES OF ASSOCIATION AND CERTAIN ASPECTS OF NORWEGIAN LAW ...... 63 13 SECURITIES TRADING IN NORWAY ...... 67 13.1 INTRODUCTION ...... 67 13.2 TRADING AND SETTLEMENT ...... 67 13.3 INFORMATION, CONTROL AND SURVEILLANCE ...... 67 13.4 THE VPS AND TRANSFER OF SHARES ...... 68 13.5 SHAREHOLDER REGISTER – NORWEGIAN LAW ...... 68 13.6 FOREIGN INVESTMENT IN SHARES LISTED IN NORWAY ...... 68 13.7 DISCLOSURE OBLIGATIONS ...... 68 13.8 INSIDER TRADING ...... 69 13.9 MANDATORY OFFER REQUIREMENT ...... 69 13.10 COMPULSORY ACQUISITION ...... 69 13.11 FOREIGN EXCHANGE CONTROLS ...... 70 14 TAXATION ...... 71 14.1 NORWEGIAN TAXATION ...... 71 15 THE PRIVATE PLACEMENT ...... 74 15.1 BACKGROUND FOR AND TERMS OF THE PRIVATE PLACEMENT ...... 74 15.2 RESOLUTIONS REGARDING THE PRIVATE PLACEMENT ...... 74 15.3 THE PRIVATE PLACEMENT SHARES ...... 75 15.4 SHARE CAPITAL FOLLOWING THE PRIVATE PLACEMENT ...... 75 15.5 DILUTION ...... 76 15.6 USE OF PROCEEDS ...... 76 15.7 ADVISORS ...... 76 15.8 NET PROCEEDS AND EXPENSES ...... 76 15.9 JURISDICTION AND CHOICE OF LAW ...... 76 16 THE SOLEX TRANSACTION ...... 77 16.1 BACKGROUND FOR AND TERMS OF THE SOLEX TRANSACTION ...... 77 16.2 RESOLUTION TO ISSUE THE CONSIDERATION SHARES ...... 77 16.3 THE CONSIDERATION SHARES ...... 78 16.4 SHARE CAPITAL FOLLOWING THE SOLEX TRANSACTION ...... 78 16.5 DILUTION ...... 78 16.6 INTERESTS OF NATURAL AND LEGAL PERSONS INVOLVED IN THE SOLEX TRANSACTION ...... 78 17 ADDITIONAL INFORMATION ...... 80 17.1 AUDITOR AND ADVISORS ...... 80 17.2 DOCUMENTS ON DISPLAY ...... 80 17.3 INCORPORATION BY REFERENCE ...... 80 18 DEFINITIONS AND GLOSSARY ...... 82
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APPENDICES
Appendix A ARTICLES OF A1 ASSOCIATION ......
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1 SUMMARY Summaries are made up of disclosure requirements known as "Elements". These Elements are numbered in Sections A– E (A.1 – E.7) below. This summary contains all the Elements required to be included in a summary for this type of securities and the Issuer. Because some Elements are not required to be addressed, there may be gaps in the numbering sequence of the Elements. Even though an Element may be required to be inserted in the summary because of the type of securities and issuer, it is possible that no relevant information can be given regarding the Element. In this case a short description of the Element is included in the summary with the mention of "not applicable".
1.1.1.1 Section A – Introduction and Warnings
A.1 Warnings This summary should be read as introduction to the Prospectus; any decision to invest in the securities should be based on consideration of the Prospectus as a whole by the investor; where a claim relating to the information contained in the Prospectus is brought before a court, the plaintiff investor might, under the national legislation of the Member States, have to bear the costs of translating the Prospectus before the legal proceedings are initiated; and civil liability attaches only to those persons who have tabled the summary including any translation thereof, but only if the summary is misleading, inaccurate or inconsistent when read together with the other parts of the Prospectus or it does not provide, when read together with the other parts of the Prospectus, key information in order to aid investors when considering whether to invest in such securities.
A.2 Consent to use of Not applicable. No consent is granted by the Company for the use of the Prospectus Prospectus for subsequent resale or final placement of the Shares.
1.1.1.2 Section B – Issuer
B.1 Legal and commercial Aega ASA. name
B.2 Domicile and legal form, The Company is a public limited liability company organised and existing legislation and country of under the laws of Norway pursuant to the Norwegian Public Limited incorporation Liability Companies Act. The Company was incorporated in Norway on 1 July 2011, and the Company’s registration number in the Norwegian Register of Business Enterprises is 997 410 440.
B.3 Current operations, The Group's business is to own and operate secondary solar parks in Italy. principal activities and The Group currently owns a portfolio of six individual solar parks in the markets Abruzzo, Umbria and Lazio regions in Italy with a combined installed capacity of 6 MW. The Group focuses on acquisitions of smaller existing solar parks that fulfills the Group's investment criteria.
B.4a Significant recent trends The wholesale price for electricity in Italy is gradually declining. The costs of operating solar power plants are gradually decreasing
B.5 Description of the Group The Company, the parent company of the Group, is a holding company and the operations of the Group are carried out through the operating subsidiaries of the Company. The solar parks are owned by five Italian entities, acting as single purpose vehicles.
B.6 Interests in the Company As of 24 March 2017, the Company had 324 shareholders. The Company’s and voting rights 20 largest shareholders as of the same date are shown in the table below:
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# Shareholders Number of Shares Percent
1 SOLEX AS ...... 7,582,534 17.28 % 2 BEARHILL INC AS ...... 3,282,034 7,48% 3 THORVALD MORRIS HARALDSEN ...... 1,605,333 3.66 % 4 TORE SÆTREMYR ...... 1,277,694 2.91 % 5 LJM AS ...... 1,134,890 2.59 % 6 MOGER INVEST AS ...... 1,134,890 2.59 % 7 MORO AS ...... 933,667 2.13 % 8 JAN STEINAR NEREM ...... 919,724 2.10 % 9 OLAV VESAAS ...... 877,141 2.00 % 10 PENTHOUSE MIRADORES AS ...... 716,667 1.63 % 11 TORSTEIN SØLAND ...... 668,890 1.52 % 12 FINN STRØM- RASMUSSEN ...... 666,667 1.52 % 13 RACCOLTA AS ...... 595,840 1.36 % 14 CLEAR THOUGHT AS ...... 551,833 1.26 % 15 BETONGCONSULT EIENDOM AS ...... 551,277 1.26 % 16 JAN P HARTO AS ...... 507,841 1.16 % 17 ROALD ARNOLD NYGÅRD ...... 500,000 1.14 % 18 VIA GLORIA AS ...... 500,000 1.14 % 19 FIN SERCK- HANSSEN ...... 462,657 1.05 % 20 MAGNOLIA SYSTEM AS ...... 450,667 1.03 %
Top 20 shareholders ...... 24,920,246 56.79 %
Others ...... 18,961,895 43.21 %
Total ...... 43,882,141 100.0%
Shareholders owning 5% or more of the Shares have an interest in the Company’s share capital which is notifiable pursuant to the Norwegian Securities Trading Act. As of the date of this Prospectus, no shareholder, other than Solex AS (approximately 17.28%) and Bearhill Inc AS (approximately 7.48%) holds more than 5% or more of the issued Shares.
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Each of the Shares carries one vote. There are no differences in voting rights between the Shares. The Company is not aware of any arrangements the operation of which may at a subsequent date result in a change of control of the Company.
B.7 Selected historical key The following selected financial information is derived from the audited financial information annual financial statements for the Group as of and for the years ended 31 December 2014 and 2015 (the "Financial Statements"), as well as the unaudited interim consolidated financial information for the Group for the fourth quarter 2016, and for the full year 2016 (the "Interim Financial Statements"). Tables presenting Interim Financial Statements also include financial figures from 2015. These figures are from Aega Yieldco AS’s business (Aega Yieldco AS was acquired on 20 January 2016. Following the acquisition, the business operated by Aega Yieldco AS constitutes the Company’s main activity, see section 7.2 for more information) and are included for comparison purposes.
The selected financial information should be read in connection with and is qualified in its entirety by reference to the Financial Statements and the Interim Financial Statements, including the auditor's reports, explanatory notes and accounting policies, incorporated hereto by reference, see Section 17.3 "Incorporation by reference".
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Year ended
31 December (NOK)
2015 2014
(audited) (audited) Statement of income Net revenue
...... 724,070 -2,190,616 Total operating cost
...... 858,188 1,611,707 Operation profit
...... -134,118 -3,802,323 Profit before income tax
...... -294,118 -4,194,263 Profit for the period -294,118 -4,194,263 Total comprehensive income for the period
...... -294,118 -4,194,263
Statement of financial position Total assets
...... 3,475,719 3,917,413 Total equity
...... 3,148,237 3,442,335 Total equity and liabilities
...... 3,475,719 3,917,413
Statement of cash flow Net cash inflow from operating activities
...... -2,841,862 184,469,753 Net cash (outflow) from financing activities
...... -159,999 -185,804,567 Cash and cash equivalents at end of year
...... 899,865 3,901,726
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Year ended
31 December (EUR)
2016 2015
(unaudited) (unaudited) Statement of income Net revenue
...... 2,406,192 942,194 Total operating cost
...... Operation profit
...... (1,219,640) (125,963) Profit before income tax
...... (1,803,594) (180,346) Profit for the period (1,762,421) (360,816) Total comprehensive income for the period
...... (1,988,550) (118,526)
Statement of financial position Total assets
...... 18,686,234 16,466,516 Total equity
...... 6,168,815 4,681,449 Total equity and liabilities
...... 18,686,235 16,466,516
Statement of cash flow Net cash inflow from operating activities
...... n/a n/a Net cash from financing activities
...... n/a n/a Cash and cash equivalents at end of year
...... n/a n/a
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Q4 Ended 31 December (EUR) 2016 2015
(audited) (audited) Statement of income Net revenue
...... 497,801 298,995 Total operating cost
...... Operation profit
...... (98,059) (391,383) Profit before income tax
...... (84,477) (425,134) Profit for the period (58,784) (585,426) Total comprehensive income for the period
...... 425,562 (226,926)
Statement of financial position Total assets
...... 18,686,234 16,466,516 Total equity
...... 6,168,815 4,681,449 Total equity and liabilities
...... 18,686,235 16,466,516
Statement of cash flow Net cash inflow from operating activities
...... 13,671 218,502 Net cash (outflow) from financing activities
...... - 1,125,578 Cash and cash equivalents at end of year
...... (339,615) (241,516)
B.8 Selected key pro forma Not applicable. financial information
B.9 Profit forecast or estimate Not applicable. No profit forecasts or estimates are made.
B.10 Audit report qualifications Not applicable. There are no qualifications in the audit reports.
B.11 Insufficient working capital Not applicable. The Company is of the opinion that the working capital available to the Group is sufficient for the Group’s present requirements, for the period covering at least 12 months from the date of this Prospectus.
1.1.1.3 Section C – Securities
C.1 Type and class of securities The Company has one class of Shares in issue and all Shares in that class admitted to trading and provide equal rights in the Company. All the Shares have been created identification number under the Norwegian Public Limited Liability Companies Act and are registered in book-entry form with the VPS under ISIN NO0010626559.
C.2 Currency of issue The Shares are issued in NOK.
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C.3 Number of shares in issue As of the date of this Prospectus, the Company’s share capital is NOK and par value 43,882,141 divided into 43,882,141 Shares, with each Share having a nominal value of NOK 1.00.
C.4 Rights attaching to the The Company has one class of Shares in issue and, in accordance with the securities Norwegian Public Liability Limited Companies Act, all Shares in that class provide equal rights in the Company. Each of the Shares carries one vote. The rights attaching to the Shares are described in Section 12.10.2 “Certain aspects of Norwegian corporate law”.
C.5 Restrictions on transfer The Articles of Association do not provide for any restrictions on the transfer of Shares, or a right of first refusal for the Company. Share transfers are not subject to approval by the Board of Directors.
C.6 Admission to trading The Shares are, and the New Shares will be, admitted to trading on Oslo Axess. The Company currently expects commencement of trading in the New Shares on Oslo Axess on the date of this Prospectus. The Company has not applied for admission to trading of the Shares on any other stock exchange or regulated market.
C.7 Dividend policy The Company aims to pay quarterly dividends by distributing excess cash generated from the power plants, adjusted for administration cost and working capital, to its shareholders.
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1.1.1.4 Section D – Risk
D.1 Key risks specific to the The Group is dependent on government subsidies, incentives Company or its industry and supportive regulatory framework. The Group may not be able to acquire additional solar power plants at commercially attractive terms. Increasing interest rates could have a significant negative impact on the profitability of investing in solar power plants. Increasing inflation could have a significant negative impact on the profitability of investing in solar power plants. Weather variations could have a material adverse effect on the Group. Falling power prices may materially reduce the Group’s income and profitability. Increasing operating expenses could have a negative effect on the Group's profit and cash-flow. The Group may suffer losses due to insufficient quality of equipment and technical breakdowns. The Group may suffer losses due to bureaucratic or executive errors and inefficiencies. The Group may suffer losses due to theft and vandalism. The Group may be negatively affected by corruption and unethical practices. The Group may be subject to changes in laws and regulations in respect of its operations. In order to execute the Group’s investment strategy, the Group may require additional capital in the future, which may not be available. Future debt levels could limit the Group's flexibility to obtain additional financing and pursue acquisition opportunities. Interest rate fluctuations could in the future affect the Group's cash flow and financial condition in addition to the price of the Shares.
D.3 Key risks specific to the There may not be a liquid market for the Shares. securities The trading price of the Shares may be volatile. Shareholders may be diluted if they are unable to participate in future offerings. Pre-emptive rights may not be available to U.S. holders and certain other foreign holders of the Shares. The transfer of Shares is subject to restrictions under the securities laws of the United States and other jurisdictions. The Company’s ability to pay dividends is dependent on the availability of distributable reserves. Market interest rates may influence the price of the Shares.
1.1.1.5 Section E – Offer
E.1 Net proceeds and The net proceeds from the Private Placement is c. NOK 14.0 million. The estimated expenses related total costs and expenses of, and incidental to, the Private Placement are to the Private Placement estimated to amount to approximately NOK 1.0 million.
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E.2a Reasons for the Private The net proceeds from the Private Placement (estimated to approximately Placement and use of NOK 14.0 million after payment of expenses), will be used to finance proceeds further growth through acquisitions of new solar parks, to cover the Additional Liabilities assumed through the Solex Transaction, and for general corporate purposes.
E.3 Terms and conditions of The Private Placement was directed towards existing shareholders, the Private Placement Norwegian investors and international institutional investors, pursuant to and in compliance with applicable exemptions from the obligation to publish an offering prospectus pursuant to the Norwegian Securities Trading Act. The New Shares were offered at a subscription price of NOK 3.00 per Share. The subscription period in the Private Placement lasted from 7 December 2016 until 19 December 2016. The payment date in the Private Placement was 22 December 2016 and the share capital increase pertaining to the Private Placement was registered with the Norwegian Register of Business Enterprises on 3 January 2017.
E.4 Material and conflicting The Manager has provided from time to time, and may provide in the interests future, investment banking services to the Company and its affiliates in the ordinary course of business, for which it may have received and may continue to receive customary fees and commissions. The Manager, its employees and any affiliate may currently own Shares in the Company. Further, the Manager has received fees in connection with the Private Placement and, as such, has an interest in the Private Placement. See Section 15.8 “Net proceeds and expenses”, for information on the fees to the Manager.
E.5 Selling shareholders and There are no selling shareholders and lock-up agreements related to the lock-up agreements Private Placement.
60% of the Consideration Shares are subject to lock-up in a 24-month period from the completion of the Solex Transaction.
E.6 Dilution resulting from the The Private Placement resulted in an immediate dilution of approximately Scheme 12.2% (not including Consideration Shares) for existing shareholders who did not participate in the Private Placement.
The issue of the Consideration Shares resulted in an immediate dilution of approximately 6.8% for the Company's shareholders based on the share capital of the Company after the Private Placement. Assuming exercise of all Warrants in addition to the issuance of the Consideration Shares, the dilutive effect will be approximately 10.9% based on the share capital of the Company after the Private Placement.
E.7 Estimated expenses Not applicable. The expenses related to the Private Placement and the charged to investor Solex Transaction will be paid by the Company.
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2 RISK FACTORS An investment in the Shares (including the New Shares) involves inherent risk. Before making an investment decision with respect to the Shares, investors should carefully consider all of the information contained in this Prospectus, and in particular the risks and uncertainties described in this Section 2, which the Company believes are the principal known risks and uncertainties faced by the Group as of the date hereof. An investment in the Shares is suitable only for investors who understand the risks associated with this type of investment and who can afford to lose all or part of their investment. The absence of negative past experience associated with a given risk factor does not mean that the risks and uncertainties described are not a genuine potential threat to an investment in the Shares. If any of the following risks were to materialise, this could have a material adverse effect on the Group and/or its business, results of operations, cash flow, financial condition and/or prospects, which may cause a decline in the value and trading price of the Shares, resulting in the loss of all or part of an investment in the same.
The order in which the risks are presented does not reflect the likelihood of their occurrence or the magnitude of their potential impact on the Group. The information in this Section 2 is as of the date of this Prospectus.
2.1 Risks related to the Group’s business and industry 2.1.1 The Group is dependent on government subsidies, incentives and supportive regulatory framework The Group depends substantially on government incentives. Without government incentives, or with reduced government incentives, the cost of electricity generated by solar power plants currently would not be competitive with conventional energy sources (e.g., nuclear power, oil, coal and gas) in most current markets, and the availability of profitable investment opportunities to the Group would be significantly lower, which could have a material adverse effect on the Group's business, financial condition, results of operations and cash flows.
Political developments could lead to a material deterioration of the conditions for, or a discontinuation of, the incentives for solar power plants. It is also possible that government financial support for solar power plants will be subject to judicial review and determined to be in violation of applicable constitutional or legal requirements, or be significantly reduced or discontinued for other reasons. A reduction of government support and financial incentives for the installation of solar power plants in any of the markets in which the Group currently operates or intends to operate in the future could result in a material decline in the availability of investment opportunities, which would have a material adverse effect on the business prospects, financial condition and results of operations of the Group. The Group's current investments are located in Italy and hence subject to the same incentive scheme regime; i.e. there is limited or no risk diversification with respect to this specific risk.
2.1.2 The Group may not be able to acquire additional solar power plants at commercially attractive terms The Group’s growth strategy is dependent on acquiring additional power plants. There can be no assurance that the Group will be able to acquire additional solar power plants at commercially attractive terms. There are a number of market players that consider investments in solar power plants in operation or solar power projects. There is thus a risk that few projects are available for the Group, or that the prices for each project increases due to competition. In addition, many projects may not fulfil the Group’s investment criteria. The Group's failure to successfully grow its operations could have a material adverse effect on the Group's business, financial condition, results of operations and cash flows.
2.1.3 Increasing interest rates could have a significant negative impact on the profitability of investing in solar power plants The Group plans to fund the acquisition of solar power plans with 70-80% debt in normal cases, and with up to 100% debt in special cases. The target leverage ratio is approximately 75% on a portfolio level. Increasing interest rates could significantly reduce the profitability of investing in solar power plants, which could have a material adverse effect on the Group’s business, prospects, financial condition and results of operations.
2.1.4 Increasing inflation could have a significant negative impact on the profitability of investing in solar power plants As the major part of the income generated by solar power plants is fixed in nominal terms and operational expenses are subject to inflation there is a risk that increasing inflation will have a material adverse effect on the profitability of the Group.
2.1.5 Weather variations could have a material adverse effect on the Group Even in a stable climate, the weather, and hence the production of energy from the solar power plants, varies from year to year. This will influence the periodic revenues, and hence the results of operation and cash-flows of the Group. Over 15 time the irradiation and production may approach the expected average, but still with the risk of less production than anticipated. However, due to climate changes it is also possible that the expected annual irradiation changes over long periods of time. It is possible that this may materially adversely influence the expected performance of the Group's plants during their technical lifetime.
2.1.6 Falling power prices may materially reduce the Group’s income and profitability The market price for electricity changes according to market conditions. In Italy, the total revenue from power sales is composed of a fixed Feed-in Tariff plus the market price for electricity. The market price component currently represents approximately 20% of revenues for the Group’s current portfolio, and in certain projects even more of the power sale revenues. If local power market prices fall, the Group’s revenues, results of operation and cash flow may be materially adversely affected. Power prices may be affected by a number of factors, including the level of installed photovoltaic ("PV") capacity and changes in the prices of hydrocarbons (e.g. oil, gas and carbon).
2.1.7 Increasing operating expenses could have a negative effect on the Group’s profit and cash-flow The Group plans to operate and maintain the power plants according to best practice and continuous improvements in a cost efficient manner. However, increased costs related to the amount of consumables or the manpower cost may change over time. Replacement of main or auxiliary systems may come at more frequent intervals than planned. Financing, insurance and regulatory requirements may also lead to increased operating cost. This may have a material adverse effect on the Group’s operating results and cash-flows.
2.1.8 The Group may suffer losses due to insufficient quality of equipment and technical breakdowns Revenues may be reduced due to insufficient quality of installed solar modules and other equipment resulting in faster than estimated degradation, and consequently lower revenues and higher maintenance costs, particularly if the product guarantees have expired or the supplier is unable or unwilling to fulfil its obligations. Even well-maintained high-quality solar power plants may from time to time experience technical break downs. These failures may have many different causes. Depending on the component that fails and the design of the plant, parts of or the entire capacity can be out of production for some time. There is a risk that the appropriate spare parts are not available for various reasons, causing a prolonged production stop. The grid operator may, from time to time, disconnect the solar power plant in periods of high grid loads. The power plants are typically designed to automatically reconnect, but experience shows that this is not always the case. There is also a risk of discrepancies between power meter readings and actual power production due to system or human failure. In such cases, it is upon the operator to justify claims for the correct revenue collection. If any of these events occur this may have a material adverse effect on the Group's business, financial condition, results of operations and cash flows.
2.1.9 The Group may suffer production losses due to natural phenomena Severe weather phenomena such as strong wind, hail storms, snow and lightening or other weather phenomena may disrupt the functionality of components or cause damage. Other phenomena that may occur are rodent damage and fires. The risk of floods, landslides, earthquakes and volcanic eruptions, and other geo hazards must be taken into account when evaluating the risk of solar power plant operations. Weather and other natural phenomena may increase operating costs as well as reduce revenues, which could materially adversely affect the Group’s business, financial condition or results of operations.
2.1.10 The Group may suffer losses due to bureaucratic or executive errors and inefficiencies The operation of the power plants includes from time to time exchange of information with relevant authorities and counterparties. Such exchange and verification of documents may take time. This may influence the Group’s ability to execute its business without delays.
It may further happen that administrative procedures in the management of the Group are subject to inefficiencies or errors which may generate costs or losses, due to improper planning or execution of work flows.
If any of these risks materialise, this may have a material adverse effect on the Group's business, financial condition, results of operations and cash flows.
2.1.11 The Group may suffer losses due to theft and vandalism Theft of PV modules and other equipment parts have occurred in Italy and elsewhere. Thefts and vandalism may cause loss of or damage to the Group’s equipment and could result in disruption of production at the Group’s power plants and thereby have a material adverse effect on the Group's business, financial condition, results of operations and cash flows.
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2.1.12 The Group may be negatively affected by corruption and other unethical practices Infrastructure projects are generally developed in close interaction with local and regional authorities. This poses a risk of corruption or other non-compliant processes with the effect that competitors have a non-compliant, but easier access to projects. It may also be a risk that projects acquired by the Group have been developed in non-transparent or non- compliant manners prior to the acquisition.
Up until the award of a license, the risk of non-compliant behaviour of a stakeholder is higher than when in production. This is a risk that is carried forward and which ultimately may under particular circumstances result in the revocation of one or several of the relevant licenses.
If any of these risks materialise, this may have a material adverse effect on the Group's business, financial condition, results of operations and cash flows. Further, the Group's reputation may be materially adversely harmed.
2.1.13 The Group’s insurance policies may not cover all losses which the Group may suffer The Group's power plants will customarily have insurance against damage and revenue loss due to incidents such as technical breakdown, natural phenomena and criminal actions. Liability insurance is also available and applicable to all power plant operations. However, the insurance policies may not cover all foreseeable and unforeseeable events, and the Group may be exposed to losses and cost of repairs that exceed normal O&M budgets and are outside the insurance agreements.
Further, under special circumstances, it could be that the amount of compensation received from the insurance company is reduced due to curtailments or other reasons, e.g. the magnitude of the total damages to be covered. The policies and policy prices may vary over time depending on the insurance products in the market and the estimated risk for the relevant operation. Any increase in insurance premiums could have an adverse effect on the Group’s results of operation and cash-flows. It might further happen that the insurance company cancels the policy.
If any of these risks materialise, this may have a material adverse effect on the Group's business, financial condition, results of operations and cash flows.
2.1.14 The Group is dependent on key members of the management team The Group’s success depends, to a significant extent, on the continued services of the individual members of its management team, who have substantial experience in the industry. The Group’s ability to continue to identify and develop opportunities depends on management’s knowledge of, and expertise in the industry, and on their external business relationships. There can be no assurance that any management team member will remain with the Group and the loss of any such members may have a material adverse effect on the Group's business, financial condition, results of operations and cash flows.
2.1.15 The Group may be subject to changes in laws and regulations in respect of its operations The Group is subject to an extensive range of laws and regulations, including, but not limited to, rules and regulations related to land utilization, development and zoning plans, property tax and HSE (health, safety and environmental), power market and grid operation rules and regulations. If the Group fails to comply with any such laws and regulations, permits or conditions, or to obtain any necessary permits or registrations, or to extend current permits or registrations upon expiry of their terms, or to comply with any restrictive terms under its current permits or registrations, the Group may be subject to, among other things, civil and criminal penalties and, in certain circumstances, the temporary or permanent curtailment or shutdown of a part of its operations, all of which may have a material adverse effect on the Group's business, financial condition, results of operations and cash flows.
Furthermore, changes in the legislative and regulatory framework governing the activities of the Group may have a material adverse impact on the Group’s business, financial condition, results of operations and cash flows.
2.1.16 Changes in, or interpretation of, tax laws create uncertainty with regard to taxation of the Group Changes in taxation law or the interpretation of taxation law may impact the business, results of operations and financial condition of the Group. To the extent tax rules change, this could have both a prospective and retrospective impact on the Group, both of which could have a material adverse effect on the Group's operations and financial condition.
2.1.17 The Group may be negatively affected by late payments of invoices There is a risk that payments of invoices for revenues are delayed due to bureaucratic procedures. This is particularly the case in the initial period of operation of a solar power plant, since registering changes of directors and management of a plant owning company after an acquisition takes time. The relevant authorities cannot execute their obligations 17 towards the power plant before the formalities are notarised and registered in official records, and after this it may still take several weeks before the changes are acknowledged with business partners and authorities. The risk of this occurring is significantly reduced about 3-9 months after completed transaction activities, but delayed receivables may nonetheless have a material adverse effect on the Group’s liquidity and cash-flows.
2.1.18 The Group may be negatively affected by disputes The Group will from time to time be involved in disputes in the ordinary course of its business activities. Such disputes may disrupt business operations and materially adversely affect the results of operations and the Group’s financial condition.
2.1.19 Exchange ratio risk The Company is located in Norway, but has the main share of its operations through Italian subsidiaries. All revenues are denominated in EUR, while costs occur in both EUR and NOK. The Company will therefore be exposed to currency risk, primarily to fluctuations in EUR and NOK. Such fluctuations could materially adversely affect the Company’s business, financial condition or results of operations.
2.1.20 Risk associated with loan financing Loan financing will generally increase the risk for investors compared to similar investments made without loan financing. The impact of changes in the value of assets will have increased effect for the change of value of the equity when all or parts of the assets are financed by loans.
2.1.21 In order to execute the Group’s investment strategy, the Group may require additional capital in the future, which may not be available To the extent the Group does not generate sufficient cash from operations, the Group may need to raise additional funds through debt or additional equity financings to execute the Group’s growth strategy and to fund capital expenditures. Adequate sources of capital funding may not be available when needed or may not be available on favourable terms. The Group’s ability to obtain such additional capital or financing will depend in part upon prevailing market conditions as well as conditions of its business and its operating results, and those factors may affect its efforts to arrange additional financing on satisfactory terms. If the Group raises additional funds by issuing additional shares or other equity or equity- linked securities, this may result in a dilution of the holdings of existing shareholders. If funding is insufficient at any time in the future, the Group may be unable to fund acquisitions, take advantage of business opportunities or respond to competitive pressures, any of which could adversely impact the Group's results of operations, cash flow and financial condition.
2.1.22 Future debt levels could limit the Group's flexibility to obtain additional financing and pursue acquisition opportunities The Group may incur additional indebtedness in the future. The level of debt could have important consequences to the Group, including the following:
• the Group’s ability to obtain additional financing for working capital, capital expenditures, acquisitions or other purposes may be impaired or such financing may be unavailable on favourable terms;
• the Group’s costs of borrowing could increase as it becomes more leveraged;
• the Group may need to use a substantial portion of its cash from operations to make principal and interest payments on its debt, reducing the funds that would otherwise be available for operations, future business opportunities and dividends to its shareholders; and
• the Group’s debt level may limit its flexibility in responding to changing business and economic conditions.
The Group’s ability to service its future debt will depend upon, among other things, its future financial and operating performance, which will be affected by prevailing economic conditions as well as financial, business, regulatory and other factors, some of which are beyond its control. If the Group’s operating income is not sufficient to service its current or future indebtedness, the Group will be forced to take action such as reducing or delaying its business activities, acquisitions, investments or capital expenditures, selling assets, restructuring or refinancing its debt or seeking additional equity capital. The Group may not be able to effect any of these remedies on satisfactory terms, or at all.
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2.2 Risks related to the Solex Transaction Aega has incurred significant financial obligations in connection with the Solex Transaction. In connection with the Solex Transaction, Aega will assume up to NOK 6.1 million in liabilities from Solex. In addition, Aega has assumed the responsibility for obligations pertaining to the transferred employees, the assigned agreements and the other assets acquired in the Solex Transaction from the date of completion of the Solex Transaction. The Company has also incurred and will incur significant transactions costs and expenses in connection with the Solex Transaction. The Group may face additional risks and challenges in connection with the integration of the assets acquired in the Solex Transaction. The Solex Transaction may not improve, and may even adversely affect, the results of operations of the Group, and the integration of the acquired assets may expose the Group to additional risks and losses unknown as of the date of this Prospectus. Further, there can be no certainty that the integration of the assets acquired through the Solex Transaction may result in the contemplated benefits in terms of costs savings and a simpler and more sustainable management structure. The integration may be unsuccessful due to numerous challenges, including but not limited to:
complications in the consolidation of administrative infrastructures;
difficulties with retaining employees or consultants; and
diversion of management's attention and resources from ongoing business concerns.
The inability to realize the contemplated benefits from the Solex Transaction, the costs of integration and other risks and losses associated with the assets acquired in the Solex Transaction, may have a material adverse effect on the Group's business, financial condition, results of operations and cash flows.
2.3 Risks relating to the Shares 2.3.1 There may not be a liquid market for the Shares Active, liquid trading markets generally result in lower price volatility and more efficient execution of buy and sell orders for investors. If there proves to be no active trading market for the Shares, the price of the Shares may be more volatile and it may be more difficult to complete a buy or sell order for Shares. Even if there is an active public trading market, there may be little or no market demand for the Shares, making it difficult or impossible to resell the Shares, which would have an adverse effect on the resale price, if any, of the Shares. Furthermore, there can be no assurance that the Company will maintain its listing on Oslo Axess. A delisting from Oslo Axess would make it more difficult for shareholders to sell their Shares and could have a negative impact on the market value of the Shares.
2.3.2 The trading price of the Shares may be volatile The trading price of the Shares could fluctuate significantly, inter alia, in response to quarterly variations in operating results, general economic outlook, adverse business developments, interest rate changes, changes in financial estimates by securities analysts, matters announced in respect of competitors or changes to the regulatory environment in which the Group operates. Market conditions may affect the Shares regardless of the Group’s operating performance or the overall performance in the industry. Accordingly, the market price of the Shares may not reflect the underlying value of the Group’s net assets, and the price at which investors may dispose of their Shares at any point in time may be influenced by a number of factors, only some of which may pertain to the Group, while others of which may be outside the Group’s control. The market price of the Shares could decline due to sales of a large number of Shares in the Company in the market or the perception that such sales could occur. Such sales could also make it more difficult for the Company to offer equity securities in the future at a time and at a price that are deemed appropriate.
2.3.3 Shareholders may be diluted if they are unable to participate in future offerings The development of the Group’s business may, inter alia, depend upon the Group’s ability to obtain equity financing. Unless otherwise resolved by the general meeting of the Company's shareholders (the "General Meeting") or the Board by proxy, shareholders in Norwegian public companies such as the Company have pre-emptive rights proportionate to the aggregate amount of the shares they hold with respect to new shares issued by the company. Shareholders that do not exercise granted pre-emptive rights may be diluted. Furthermore, shareholders may be unable to participate in future offerings, due to deviation from the shareholders' pre-emptive rights in order to raise equity on short notice in the investor market, or for reasons relating to foreign securities laws or other factors, and as such have their shareholdings diluted.
2.3.4 Pre-emptive rights may not be available to U.S. holders and certain other foreign holders of the Shares Under Norwegian law, prior to the Company’s issuance of any new shares for consideration in cash, the Company must offer holders of the Company’s then-outstanding Shares pre-emptive rights to subscribe and pay for a sufficient number of Shares to maintain their existing ownership percentages, unless these rights are waived at a General Meeting. These 19 pre-emptive rights are generally transferable during the subscription period for the related offering and may be listed on Oslo Axess. U.S. holders of the Shares may not be able to receive, trade or exercise pre-emptive rights for new Shares unless a registration statement under the U.S. Securities Act is effective with respect to such rights or an exemption from the registration requirements of the U.S. Securities Act is available. The Company is not a registrant under the U.S. securities laws. If U.S. holders of the Shares are not able to receive, trade or exercise pre-emptive rights granted in respect of their Shares in any rights offering by the Company, then they may not receive the economic benefit of such rights. In addition, their proportional ownership interests in the Company will be diluted. Similar restrictions may apply to other foreign holders of Shares, including, but not limited to shareholders in Australia, Canada, Hong Kong, Japan and Switzerland.
2.3.5 Holders of Shares that are registered in a nominee account may not be able to exercise voting rights as readily as shareholders whose Shares are registered in their own names with the Norwegian Central Securities Depository Beneficial owners of the Shares that are registered in a nominee account (e.g., through brokers, dealers or other third parties) ("NOM-account") may not be able to vote for such Shares unless their ownership is re-registered in their names with the VPS prior to the Company’s General Meetings. The Company cannot guarantee that beneficial owners of the Shares will receive the notice for a General Meeting in time to instruct their nominees to either effect a re-registration of their Shares or otherwise vote for their Shares in the manner desired by such beneficial owners.
2.3.6 The transfer of Shares is subject to restrictions under the securities laws of the United States and other jurisdictions The Company has not registered the Shares under the U.S. Securities Act or the securities laws of jurisdictions other than Norway and the Company does not expect to do so in the future. The Shares may not be offered or sold in the United States, nor may they be offered or sold in any other jurisdiction in which the registration of the Shares is required but has not taken place, unless an exemption from the applicable registration requirement is available, or the offer or sale of the Shares occurs in connection with a transaction that is not subject to these provisions. In addition, there can be no assurance that shareholders residing or domiciled in the United States will be able to participate in future capital increases or exercise subscription rights.
2.3.7 The Company’s ability to pay dividends is dependent on the availability of distributable reserves Norwegian law provides that any declaration of dividends must be adopted by the shareholders at the Company’s General Meeting or by the Company's board of directors (the "Board of Directors" or the "Board") pursuant to an authorisation granted by the General Meeting. Dividends may only be declared to the extent that the Company has distributable funds and the Board of Directors finds such a declaration to be prudent in consideration of the size, nature, scope and risks associated with the Company’s operations and the need to strengthen its liquidity and financial position. As the Company’s ability to pay dividends is dependent on the availability of distributable reserves, it is, among other things, dependent upon receipt of dividends and other distributions of value from its subsidiaries.
As a general rule, the General Meeting may not declare higher dividends than the Board of Directors has proposed or approved. If, for any reason, the General Meeting does not declare dividends in accordance with the above, a shareholder will, as a general rule, have no claim in respect of such non-payment, and the Company will, as a general rule, have no obligation to pay any dividend in respect of the relevant period.
2.3.8 Investors may be unable to recover losses in civil proceedings in jurisdictions other than Norway The Company is a Norwegian public limited liability company organised under the laws of Norway. All of the members of the Board of Directors and of the Company’s corporate management reside in Norway. As a result, it may not be possible for investors to effect service of process in other jurisdictions upon such persons or the Company, to enforce against such persons or the Company judgments obtained in non-Norwegian courts, or to enforce judgments on such persons or the Company in other jurisdictions.
2.3.9 Norwegian law may limit shareholders’ ability to bring an action against the Company The rights of holders of the Shares are governed by Norwegian law and by the Articles of Association. These rights may differ from the rights of shareholders in other jurisdictions. In particular, Norwegian law limits the circumstances under which shareholders of Norwegian companies may bring derivative actions. For instance, under Norwegian law, any action brought by the Company in respect of wrongful acts committed against the Company will be prioritised over actions brought by shareholders claiming compensation in respect of such acts. In addition, it may be difficult to prevail in a claim against the Company under, or to enforce liabilities predicated upon, securities laws in other jurisdictions.
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2.3.10 Market interest rates may influence the price of the Shares One of the factors that may influence the price of the Shares is its annual dividend yield as compared to yields on other financial instruments. Thus, an increase in market interest rates will result in higher yields on other financial instruments, which could materially adversely affect the price of the Shares.
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3 RESPONSIBILITY FOR THE PROSPECTUS This Prospectus has been prepared in connection with the Listing of the New Shares on Oslo Axess.
The Board of Directors of Aega ASA accepts responsibility for the information contained in this Prospectus. The members of the Board of Directors confirm that, after having taken all reasonable care to ensure that such is the case, the information contained in this Prospectus is, to the best of their knowledge, in accordance with the facts and contains no omission likely to affect its import.
29 March 2017
The Board of Directors of Aega ASA
Knut Øversjøen Geir Upsaker Chairman Board member
Anne Young Syrrist Board member
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4 GENERAL INFORMATION 4.1 Other important investor information The Company has furnished the information in this Prospectus. No representation or warranty, express or implied is made by the Managers as to the accuracy, completeness or verification of the information set forth herein, and nothing contained in this Prospectus is, or shall be relied upon as, a promise or representation in this respect, whether as to the past or the future. The Managers assume no responsibility for the accuracy or completeness or the verification of this Prospectus and accordingly disclaims, to the fullest extent permitted by applicable law, any and all liability whether arising in tort, contract or otherwise which it might otherwise be found to have in respect of this Prospectus or any such statement.
Neither the Company nor the Managers, or any of their respective affiliates, representatives, advisers or selling agents, is making any representation to any offeree or purchaser of the Shares (including the New Shares) regarding the legality of an investment in the Shares. Each investor should consult with his or her own advisors as to the legal, tax, business, financial and related aspects of a purchase of the New Shares.
This prospectus has been prepared in accordance with the simplified disclosure regime for small and medium sized enterprises and companies with reduced market capitalisation.
Investing in the Shares involves a high degree of risk. See Section 2 “Risk Factors”.
4.2 Presentation of financial and other information 4.2.1 Financial information This Prospectus includes the audited annual financial statements for the Group as of and for the years ended 31 December 2014 and 2015 (the "Financial Statements"). Such Financial Statements have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union ("IFRS"). In addition, this Prospectus includes the unaudited financial statements for the Group for the year ended 31 December 2016 as well as the unaudited financial statements for Group for the fourth quarter of 2016 (the "Interim Financial Statements") which has been derived from the Group’s latest interim financial report. The Interim Financial Statements have been prepared in accordance with International Accounting Standard 34 “Interim Financial Reporting” as adopted by the European Union ("IAS 34"). The Financial Statements and the Interim Financial Statements are together referred to as the "Financial Information". The Financial Information is incorporated by reference hereto, see Section 17.3 "Incorporation by reference".
The tables presenting Financial Information in Section 9 also sets out unaudited financial figures for Aega Yieldco AS’ business (the Company acquired Aega Yieldco AS on 20 January 2016 in a reverse takeover transaction, see section 7.2 or prospectus dated 18 August 2016 for more information) for the year ended 31 December 2015 and for the fourth quarter ended 31 December 2015. These figures are derived from the Company’s interim report for the fourth quarter of 2016 and are included for comparison purposes.
As a result of the change of the business of the Company following the acquisition of Aega Yieldco AS (the "Acquisition", see Section 7.2 for more information), the Company decided to change the reporting currency from NOK to EUR with effect from 1 January 2016. The main revenues of the Company currently come from Italy and are denominated in EUR. Thus, the Financial Statements included in this Prospectus are presented in NOK, while the Interim Financial Statements are presented in EUR.
It should be noted that the Financial Statements are not directly comparable to the Interim Financial Statements since the Company changed its strategic direction from making financial investments to investing in secondary solar parks in Italy following the Acquisition.
4.2.2 Industry and market data This Prospectus contains statistics, data, statements and other information relating to markets, market sizes, market shares, market positions and other industry data pertaining to the Company’s future business and the industries and markets in which it operates. Unless otherwise indicated, such information reflects the Company’s estimates based on analysis of multiple sources, including data compiled by professional organisations, consultants and analysts and information otherwise obtained from other third party sources, such as annual financial statements and other presentations published by listed companies operating within the same industry as the Group as well as the Company's internal data and own experience, or on a combination of the foregoing. Unless otherwise indicated in the Prospectus, the basis for any statements regarding the Company’s competitive position in the future is based on the Company’s own assessment and knowledge of the markets in which the Group operates.
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The Company confirms that where information has been sourced from a third party, such information has been accurately reproduced and that as far as the Company is aware and is able to ascertain from information published by that third party, no facts have been omitted that would render the reproduced information inaccurate or misleading. Where information sourced from third parties has been presented, the source of such information has been identified. The Company does not intend, and does not assume any obligations to update industry or market data set forth in this Prospectus.
Industry publications or reports generally state that the information they contain has been obtained from sources believed to be reliable, but the accuracy and completeness of such information is not guaranteed. The Company has not independently verified and cannot give any assurances as to the accuracy of market data contained in this Prospectus that was extracted from these industry publications or reports and reproduced herein. Such statistics are based on market research, which itself is based on sampling and subjective judgments by both the researchers and the respondents, including judgments about what types of products and transactions should be included in the relevant market.
As a result, prospective investors should be aware that statistics, data, statements and other information relating to markets, market sizes, market shares, market positions and other industry data in this Prospectus (and projections, assumptions and estimates based on such information) may not be reliable indicators of the Company’s future performance and the future performance of the industry in which it operates. Such indicators are necessarily subject to a high degree of uncertainty and risk due to the limitations described above and to a variety of other factors, including those described in Section 2 “Risk Factors” and elsewhere in this Prospectus.
4.2.3 Other information In this Prospectus, all references to "NOK" are to the lawful currency of Norway and all references to "EUR" are to the lawful currency of the European Union. No representation is made that the NOK or EUR amounts referred to herein could have been or could be converted into NOK or EUR, as the case may be, at any particular rate, or at all. The Financial Statements are published in NOK, while the Interim Financial Statements is published in EUR. In this Prospectus, the selected information from the Financial Statements included in Section 9 is presented in NOK, while the selected financial information from the Interim Financial Statements is presented in EUR.
4.2.4 Rounding Certain figures included in this Prospectus have been subject to rounding adjustments (by rounding to the nearest whole number or decimal or fraction, as the case may be). Accordingly, figures shown for the same category presented in different tables may vary slightly. As a result of rounding adjustments, the figures presented may not add up to the total amount presented.
4.3 Cautionary note regarding forward-looking statements This Prospectus includes forward-looking statements that reflect the Group’s current intentions, beliefs or current expectations concerning, among other things, financial position, operating results, liquidity, prospects, growth, strategies and the industries and markets in which the Group operates. These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "anticipates", "assumes", " believes", "can", "could", "estimates", " expects", " forecasts", "intends", "may", " might", " plans", "projects", "should", "will", "would" or, in each case, their negative, or other variations or comparable terminology. Forward-looking statements as a general matter are all statements other than statements as to historic facts or present facts or circumstances. They appear in a number of places throughout this Prospectus, including, without limitation in Section 5 "Dividend Policy", Section 6 "Industry and Market Overview", Section 7 "Business of the Group", and Section 9 "Selected Financial and other Information", and include, among other things, statements relating to:
the Group’s strategy, outlook and growth prospects and the ability of the Group to implement its strategic initiatives; the Group’s future results of operations; the Group’s financial condition; the Group’s working capital, cash flows and capital investments; the Group’s dividend policy; the impact of regulation on the Group; general economic trends and trends in the Group’s industries and markets; and the competitive environment in which the Group operates.
Prospective investors in the Shares are cautioned that forward-looking statements are not guarantees of future performance and that the Group’s actual financial position, operating results and liquidity, and the development of the 24 industries and markets in which the Group operates, may differ materially from those made in or suggested by the forward-looking statements contained in this Prospectus. The Group can provide no assurances that the intentions, beliefs or current expectations upon which its forward-looking statements are based will occur.
Although the Group believes that the expectations implied by these forward-looking statements are reasonable, the Group can give no assurances that the outcomes contemplated will materialise or prove to be correct. By their nature, forward-looking statements involve and are subject to known and unknown risks, uncertainties and assumptions as they relate to events and depend on circumstances that may or may not occur in the future. Because of these known and unknown risks, uncertainties and assumptions, outcomes may differ materially from those set out in any forward-looking statement.
Important factors that could cause those differences include, but are not limited to:
disruptions to production; implementation of the Group's strategy and its ability to further expand its business and growth; technological changes and new products and services introduced into the Group’s market and industry; ability to acquire new solar power plants and maintain existing plants; the competitive nature of the business the Group operates in and the competitive pressure and changes to the competitive environment in general; loss of customers; earnings, cash flow, dividends and other expected financial results and conditions; fluctuations of exchange and interest rates; changes in general economic and industry conditions; political and governmental and social changes; changes in the legal and regulatory environment; environmental liabilities; changes in consumer trends; access to funding; and legal proceedings.
Additional factors that could cause the Group’s actual results, performance or achievements to differ materially include those discussed under Section 2 “Risk Factors”. Investors are urged to read all sections of this Prospectus and, in particular, Section 2 "Risk Factors" for a more complete discussion of the factors that could affect the Group’s future performance and the industry in which the Group operates when considering an investment in the Company.
These forward-looking statements speak only as of the date of this Prospectus. Save as required by Section 7-15 of the Norwegian Securities Trading Act or by other applicable law, the Company expressly disclaims any obligation to publicly update or publicly revise any forward-looking statement, whether as a result of new information, future events or otherwise. All subsequent written and oral forward-looking statements attributable to the Group or to persons acting on the Group’s behalf are expressly qualified in their entirety by the cautionary statements referred to above and contained elsewhere in this Prospectus. Accordingly, prospective investors are urged not to place undue reliance on any of the forward-looking statements herein.
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5 DIVIDEND POLICY 5.1 Dividend policy In deciding whether to propose a dividend and in determining the dividend amount, the Board of Directors will take into account legal restrictions, as set out in the Norwegian Public Limited Liability Companies Act of 13 June 1997 No 45 (the "Norwegian Public Limited Liability Companies Act") (see Section 5.3 “Legal constraints on the distribution of dividends”).
Under the current dividend policy adopted by the Board of Directors, the Company intends to pay quarterly dividends and distribute excess cash generated, adjusted for working capital needs, to shareholders. The Company expects to generate positive cash flow when passing ~10MWp installed capacity.". There can be no assurances that in any given year a dividend will be proposed or declared, or if proposed or declared, that the dividend will be in the range contemplated by the policy. Further, the Company's dividend policy may change in the future. Holders of the Private Placement Shares will be entitled to dividends declared after registration of the share capital increase pertaining to the Private Placement Shares in the Norwegian Register of Business Enterprises. Holders of the Consideration Shares will be entitled to dividends declared after registration of the share capital increase pertaining to the Consideration Shares in the Norwegian Register of Business Enterprises.
5.2 Distributed dividends The Company has since its incorporation distributed the dividends set out in the table below.
Dividend amount per Number of Dividend per 1 Share (NOK) Shares Total dividend current share Dividend 20 March 32.0 2,209,020 70,688,640 1.61 2014 ...... Dividend 17 June 3.0 2,209,020 6,627,060 0.15 2014 ...... Dividend 22 September 7.0 2,209,020 15,463,140 0.35 2014 ...... Dividend 29 February 0.0265 27,360,295 725,048 0.02 2016 ...... Dividend 31 May 0.075 27,360,295 2,052,022 0.05 2016 ...... Dividend 31 August 0.075 35,890,957 2,691,822 0.06 2016 ...... Dividend 28 December 0.03 35,890,957 1,076,729 0.02 2016 ......
1 Total dividend divided by current number of shares (43,882,141 shares).
5.3 Legal constraints on the distribution of dividends Dividends may be paid in cash, or in some instances, in kind. The Norwegian Public Limited Liability Companies Act provides the following constraints on the distribution of dividends applicable to the Company:
Section 8-1 of the Norwegian Public Limited Liability Companies Act provides that the Company may distribute dividends to the extent that the Company’s net assets, following the distribution covers (i) the share capital, (ii) the reserve for valuation variances and (iii) the reserve for unrealised gains. The amount of any receivable held by the Company which is secured by a pledge over Shares in the Company, as well as the aggregate amount of credit and security which, pursuant to Section 8–7 to 8-10 of the Norwegian Public Limited Liability Companies Act fall within the limits of distributable equity, shall be deducted from the distributable amount.
The calculation of the distributable equity shall be made on the basis of the balance sheet included in the approved annual accounts for the last financial year, provided, however, that the registered share capital as of the date of the resolution to distribute dividends shall be applied. Following the approval of the annual accounts for the last financial year, the General Meeting may also authorise the Board of Directors to declare 26
dividends on the basis of the Company’s audited annual accounts. Dividends may also be resolved by the General Meeting based on an interim balance sheet which has been prepared and audited in accordance with the provisions applying to the annual accounts and with a balance sheet date not further into the past than six months before the date of the General Meeting’s resolution.
Dividends can only be distributed to the extent that the Company’s equity and liquidity following the distribution is considered sound by the Board of Directors, acting prudently.
In deciding whether to propose a dividend and in determining the dividend amount, the Board of Directors will take into account legal restrictions, as set out in the Norwegian Public Limited Liability Companies Act, the Company’s capital requirements, including capital expenditure requirements, its financial condition, general business conditions and any restrictions that its contractual arrangements in place at the time of the dividend may place on its ability to pay dividends and the maintaining of appropriate financial flexibility. Except in certain specific and limited circumstances set out in the Norwegian Public Limited Liability Companies Act, the amount of dividends paid may not exceed the amount recommended by the Board of Directors.
The Norwegian Public Limited Liability Companies Act does not provide for any time limit after which entitlement to dividends lapses. Subject to various exceptions, Norwegian law provides a limitation period of three years from the date on which an obligation is due. There are no dividend restrictions or specific procedures for non-Norwegian resident shareholders to claim dividends. For a description of withholding tax on dividends applicable to non-Norwegian residents, see Section 14 "Taxation".
5.4 Manner of dividend payments Any future payments of dividends on the Shares will be denominated in the currency of the bank account of the relevant shareholder, and will be paid to the shareholders through the VPS. Shareholders registered in the VPS who have not supplied the VPS with details of their bank account, will not receive payment of dividends unless they register their bank account details with the VPS registrar. The exchange rate(s) that is applied when denominating any future payments of dividends to the relevant shareholder's currency will be the VPS registrar's exchange rate on the payment date. Dividends will be credited automatically to the VPS registered shareholders’ accounts, or in lieu of such registered account, at the time when the shareholder has provided the VPS registrar with their bank account details, without the need for shareholders to present documentation proving their ownership of the Shares. Shareholders' right to payment of dividend will lapse three years following the resolved payment date for those shareholders who have not registered their bank account details with the VPS registrar within such date. Following the expiry of such date, the remaining, not distributed dividend, will be returned from the VPS registrar to the Company.
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6 INDUSTRY AND MARKET OVERVIEW 6.1 Introduction The Company’s business activity consists of investing in the Italian secondary solar market and operating the acquired solar power plants. Investing in the secondary solar market implies that the Company acquires solar parks that have already been built, and that the Company is not engaged in project development or construction of solar parks.
This chapter provides an overview of the market for secondary solar power plants in Italy.
6.2 General Italy has been one of Europe’s top performers for solar park installations until 2012, when construction activity was dramatically reduced due to a reform of the country’s generous support policies for renewable energy in an attempt to control costs.
6.2.1 Historical development of installed solar power capacity in Italy The total installed solar power capacity in Italy reached 18.9 GWp (= 18.900 MWp) in 2015. As highlighted in the graph below, construction of new projects boomed in the years leading up to 2012 when the generous support policies was reformed. Construction of new projects has dropped significantly following the reform.
20
18
16
14
12
10
8
6
4
2
0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Total PV installed capacity in Italy (GW)
Source: Bloomberg New Energy Finance (BNEF) and PHOTON International
6.2.2 Revenue components The operating revenue for a solar power plant is a function of produced volume (kWh of electricity) and the achieved selling price per kWh. The selling price for the Company’s solar parks can be divided into two components (i) the Feed- in Tariff ("FiT"), and (ii) the market price of electricity.
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6.2.2.1 Feed-in Tariff (FiT) The Feed-in Tariff is a fixed nominal fee that is paid to the operator of a solar power plant for each kWh of produced electricity over a 20 year contract period. Payment of FiT is managed by Gestore dei Servizi Energetici ("GSE"), which is a governmental agency with the purpose of promoting and supporting renewable energy sources in Italy. The fixed Feed-in Tariff received from GSE typically represents approximately 80-90% of the solar power plant revenues. Since 6 July 2013, FiTs are no longer available to newly permitted PV projects.
6.2.2.2 Market price The actual wholesale price of electricity is paid to the operator of a solar power plant for each kWh of produced electricity the system feeds into the electrical grid (an interconnected network for delivering electricity from suppliers to consumers). The system operator can decide whether to sell the electricity on the spot market or agree on a fixed contract.
The wholesale power price in Italy has been fairly volatile since 2004, and the price increased from just above 50 EUR/MWh in 2004 to the peak level of 80-90 EUR/MWh in 2008. In recent years, the price has dropped to between 40- 55 EUR/MWh. The construction of PV and wind power plants between 2008 and 2012 and the decrease in electricity consumption are seen as the main forces behind the price decrease by the Italian regulatory Authority for Electricity, Gas and Water.
100
90
80
70
60
50
EUR/MWh 40
30
20
10
0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 YTD
Average National Single Price Italy (EUR/MWh)
Source: http://www.mercatoelettrico.org/ as of 11 July 2016.
According to the Italian regulatory Authority for Electricity, Gas and Water, consumption of electricity has fallen from about 340 TWh in 2008 to 310 TWh in 2014. In 2015 the electricity consumption increased 1.5% and ended at about 315 TWh. The Italian domestic production in 2015 was 270 TWh which represents a small increase from 269 TWh in 2014. From the top domestic production in 2009, the production has decreased about 10%. The gap between consumed and produced electricity is imported. In 2015 PV plants produced 7.8% of the electricity consumed.
6.2.3 The 2014 retroactive policy change In 2014, the Italian government approved law n. 116/2014. Said law changed, with retroactive effect, the incentives regime, by reducing the compensation paid to owners of solar power plants built under Conto Energia II, III, IV and V and larger than 200kW, starting from January 2015. The owners of PV plants were asked to choose one out of four options:
1. Accept a flat 6-8% reduction in FiT payments over the entire FiT period, depending on the plant size; 29
2. Accept a larger reduction, of 17-25%, but get an extension of the FiT to 24 years, instead of the standard 20;
3. Maintain the 20 years FiT payment period but accept reduced payments in the first half period, to be compensated for in the second half; or
4. Liquidate the remaining cash flows at a discount rate.
Option number 1 above has been chosen for all of the Groups solar power plants (as further described in Section 7.4.5 below), except from one, Piano Molino, where option 3 above was chosen.
For option 1, the yearly FiT reduction corresponding to system size is set out in the table below:
Project size Yearly FiT % reduction 200 – 500 kW 6% 500 – 900 kW 7% >900 kW 8%
Owners who chose option 2 accepted a cut in the remaining FiT period depending on the age of the project, and the corresponding reductions are set out in the table below:
Remaining Incentive Period FiT % reduction 12 years 25% 13 years 24% 14 years 22% 15 years 21% 16 years 20% 17 years 19% 18 years 18% 19 years or more 17%
The Italian government’s changes to the renewable incentives triggered distress amongst some owners of solar power plants, especially smaller operators, and Lazio’s administrative court questioned the legality of the retroactive PV reductions in June 2015, by referring the legitimacy of the law to the Italian Supreme Court. On 7 December 2016, the Supreme Court declared unfounded the question of legitimacy, confirming the decision to be legitimate and lawful. As the Company expected this outcome, this is not changing any approach for the Company. On the contrary, the decision provides a certain stability and predictability in the FiT regime.
6.3 Market information specific for the Company’s investments Aega will focus on a niche of the Italian secondary solar market consisting of parks having a size between 1 MW up to 5 MW (the "Small Parks"). In Italy the Small Parks currently represent approximately 8 GW out of the 18 GW of installed solar power capacity. Owners of Small Parks are usually less professional investors than those investing in the segment of larger parks (>5 MW). The investors in Small Parks are typically local investors and land owners since the transaction size is often too small for larger investment funds and international investors.
Each investment opportunity is tested against the Company’s strict investment criteria set out in clause 7.4.4 below. Solex has estimated that roughly 2,000 MW (=2 GW) of the total installed capacity in Italy meet the Company’s strict investment criteria.
6.4 Competition Since 2008 international financial investors have invested in the solar market. Some of the investors own large portfolios in markets such as in Italy, Germany and France.
In the Nordic region there are a few players that offer power plant investments to the retail and the institutional market. For instance, Scatec Solar ASA is relatively well known in the Nordic region, but has a different business model than the Company as it also entails project development and invests mainly outside Europe.
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In the Italian solar space, the number of transactions has increased during 2015 and 2016, especially for parks larger than 5 MW. The largest players are either infrastructure funds such as F2i SGR and Quercus Assets Selection, or pension/insurance funds such as German Gothaer Insurance Group and Swiss Life Asset Managers. In the segment for parks below 5 MW the Competitors of the Company are typically family investment companies that invest in a large variety of industries. In general, the buy side competition on solar parks/portfolios below 5 MW is less fierce than for larger parks. The lower level of competition and competitors that on average have higher cost of capital than the infrastructure and pension funds normally result in lower prices for smaller parks and portfolios.
The Company believes that the solar energy market will attract even more financial investors in the next years.
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7 BUSINESS OF THE GROUP 7.1 Introduction The Company business consists in investing in the Italian secondary solar market and operating the acquired solar power plants.
7.2 History and development of the Group The Company was incorporated in Norway on 1 July 2011 under the name Nordic Financial AS by a demerger of Nordisk Finans Invest AS. Shortly after, on 7 October, the Company was converted into a public limited liability company and changed its name to Nordic Financial ASA. The shares in the Company were listed on Oslo Axess on 7 November 2011 under the ticker code "NOFIN". The Company was an investment company, which was created to exploit the market situation to make opportunistic financial investments in banks and financial institutions in the Nordic region. The Company had an agreement on active management of its investments with Warren Capital AS. The agreement meant that the asset manager took the ongoing investment decisions on behalf of the Company. The agreement laid the framework for portfolio diversification and risk exposure, and the manager invested within these limits based on its view of the market. An annual dividend of NOK 2.50 per share was distributed in both 2012 and 2013.
A new Board of Directors was elected at the extraordinary General Meeting held on 10 January 2014. The new Board of Directors found that the shareholders would be better off if the Company's funds were returned to the shareholders. Consequentially, the agreement with Warren Capital AS was terminated and the Board of of Directors took over the management of the Company’s investments. The Company’s portfolio investments were realized in 2014 and excess liquidity was used to repay loans and distribute dividends to shareholders. Except for a small investment in shares in Wilson ASA, the Company has now realised all of its investment portfolio. Following the realization of the portfolio investments and the decision to return available funds to the shareholders, the Company executed three dividend payments of NOK 32 per share, NOK 3 per share and NOK 7 per share, respectively in 2014. The Board of Directors also initiated discussions with certain of the Company's major shareholders relating to the future strategy of the Company.
In 2015, a new Board of Directors and election committee was elected at the extraordinary General Meeting held on 18 December, and the Company subsequently decided to conduct a shift of the Company's focus from traditional equity investments to direct investments in secondary solar parks in Italy. On 21 December 2015, the Company announced the signing of a letter of intent to acquire Aega Yieldco AS ("Yieldco"). Yieldco was a solar utility company that acquired and operated solar power plants.
On 20 January 2016 Aega completed the Acquisition and purchased of 100% of the issued shares in Yieldco, against a consideration of approximately NOK 75.5 million. The consideration was settled by the issuance of 25,151,275 shares in Aega, valued at NOK 3.00 per share, to the shareholders of Yieldco on 20 January 2016. At the time of the Acquisition, Yieldco owned a portfolio of five individual solar parks in the Umbria and Lazio regions in Italy with a combined production capacity of 5MW.
The Acquisition represented a change in strategic direction for the Company to investments in secondary solar parks in Italy (following the Acquisition, the business operated by Yieldco constitutes the Company’s main activity). As a consequence of the strategic shift, the Company was on 18 January 2016 renamed Aega ASA.
In May 2016, the Company completed a private placement raising NOK 25.5 million in new capital. Following the private placement, the Company purchased a new solar park (Piano Molino) in June, increasing total production capacity to 6 MW. The Company also changed to a quarterly dividend policy in 2016.
7.3 The acquisition of Piano Molino S.r.l. 7.3.1 General On 24 June 2016, the Company acquired from the Italian solar industry player Solis SpA, the entire share capital of Piano Molino S.r.l, an Italian limited liability company owing a 1 MW solar plant located in Casoli, Abruzzo. The purchase price was EUR 1,200,000 and the parties agreed that the solar plant shall be returned to the seller, Solis SpA, after the expiry of the FiT.
The 1 MW solar park located in Casoli is a fixed ground mounted system, is six years into its 20-year concession period, and delivers an internal rate of return (IRR) in line with the Group's current assets and overall investment target (estimated to 15.5% before management fees and optimizations).
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As a result of the transaction, the Group increased its total installed capacity from 5 MW to 6 MW. The growth target of the Group is to reach 20 MW installed capacity by the end of 2017, and any acquisition is an important step in that direction.
7.3.2 Purchase price allocation The Company's purchase price allocation for Piano Molino S.r.l. is set out in the table below.
In EUR Fair value recognized on (unaudited figures) acquisition
Current assets & liabilities -27,845 Cash, bank & securities 0 Receivables 132,752 Inventories, advances to suppliers etc. 2,768 Accounts payable and accrued liabilities -83,760 Tax withholdings, public fees, payroll tax, etc. -79,605 Other current liabilities 0
Long term positions 1,227,845 Deferred tax -66,628 Power plant, equipment and land 2,938,290 Derivative agreement -40,712 Long term financing -1,603,104
Assets identified for acquisition -1,200,000 Paid for corporate capital at closing -960,000 Paid into escrow -240,000
Consideration not allocated 0
The difference between the consideration and identified assets of EUR 318,330 has been allocated to the solar power plant. The payment for corporate capital has been split in two, EUR 960,000 was paid directly to Solis SpA and EUR 240,000 has been transferred to an escrow account held by an Italian notary. The escrow amount will be released on certain conditions defined in the purchase agreement between Solis SpA and the Company.
7.4 Business of the Group 7.4.1 Objectives and strategy The Group acquires and manages Italian limited liability companies (SPVs) owing solar power plants in Italy. It should be noted that the Company only invests in solar parks with governmental supported FiTs in place. Since the Italian government ceased to offer FiTs for new PV projects on 6 July 2013, the Company will only acquire parks built before said date.
The SPVs can be purchased directly by the Company or indirectly by a subsidiary of the Company. This structure gives flexibility in case of potential restructurings of the assets, and minimizes potential operational and financial risks by isolating the SPV affected by the potential issue.
The profits generated by the SPVs will be transferred to the Company in the form of dividends or group contributions.
The Company will focus on maximizing the Company's shareholders’ value through best practice operations.
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7.4.2 Business plan 7.4.2.1 Main strategic objectives In the Group’s current business plan two main strategic objectives have been indicated:
1. The Group aims to grow its portfolio and the first milestone will be to reach a size of 20 MW that provides alignment between cash flow and existing cost base.
2. The Group's objective is to pay quarterly dividends by distributing excess cash generated from the power plants, adjusted for administration cost and working capital, to its shareholders.
7.4.2.2 The key assumptions upon which the business plan is based and sensitivity analysis Availability of attractive projects
As further described in the risk factor set out in Section 2.1.2, the growth and dividend objectives will depend on solar plants being available at commercially attractive terms in compliance with the Group's investment criteria. The solar plants have to be available at such terms going forward, in order for the Group to reach its growth ambitions.
Availability of financing
I order grow its solar plant portfolio, the Group will need access to financing at commercially attractive terms. Any failure or delay in acquiring such financing will most likely mean that the Group will not, or be delayed in fulfilling, its growth ambitions. Reference is in this regard made to the risk factor described in Section 2.1.21.
Interest rates
As discussed in the risk factor described in Section 2.1.3, the individual solar parks the Group is targeting are normally financed with 70-80% debt. Such debt levels will be required in order for the Group to be able to pay dividends. However, the ability to distribute the dividends will also, among other factors, be dependent on the interest level on the financing. To mitigate this risk, the Group normally takes over, or enters into, new interest swap contracts to fix the interest rate when new plants are acquired, but there can be no assurance that the dividends will be distributed in the future.
Changes in FiT
The Group has one costumer that accounts for above 80% of the Group's revenue, namely the GSE. As further described in the risk factor described in Section 2.1.1, any material deterioration of the conditions for, or a discontinuation of, the incentives for solar power plants could severely damage the Group's business prospects, financial condition and results of operations of the Group and hence the Group's capability to distribute dividends.
Competitors
If more competitors start buying parks within the Group’s investment scope, it could possibly make it difficult for the Group to reach its current strategic objectives. Reference is made to Section 6.4 "Competition" for further information regarding competitors.
7.4.3 Group structure Reference is made to the chart included in Section 12.2 setting out the structure of the Group.
7.4.4 Investment criteria Each investment opportunity is tested against the Company’s strict investment criteria. The investment focus can be summarized as targeting;
1. High quality parks with low risks, as determined by the internal technical expertise and external professional advisers.
2. Smaller parks (1-5 MW) reaping economies of scale from being a professional and focused manager.
3. Fixed ground mounted solar parks, representing lower technical and operational risk.
4. Projects with geographic focus in the northern part of Italy, aiming at decreased business environment risks.
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5. Projects offering adequate risk weighted yield and return potential.
6. Legally sound projects with no red flags.
7. Projects with potential for performance improvements.
7.4.5 Description of the owned power plants 7.4.5.1 General The Company currently owns a portfolio of six individual solar parks in Italy with an installed capacity of 6 MW. The Company focuses on acquisitions of smaller existing and operating solar parks (below 5 MW capacity), meeting the investment criteria included above.
7.4.5.2 Photo-Volt One S.r.l The power plant named Montalto, owned by the SPV Photo-Volt One S.r.l, is located in the municipality of Montalto di Castro in the Lazio region. The solar park is ground mounted and has an installed capacity of 997.5 kW. The annual base case production (i.e. the expected annual production) is 1.19 GWh. The annual production (measured in kWh/MWh/GWh) equals the installed capacity (measured in kWp/MWp/GWp) multiplied by the annual solar irradiation (measured as inflow per m2). The power plant commenced commercial operation in August 2011 and was purchased by the Group in the third quarter of 2014.
7.4.5.3 Terni (DT S.r.l) The power plant named DT, owned by the SPV DT S.r.l, is located in the municipality of Terni in the Umbria region. The solar park is ground mounted and has an installed capacity of 995.22 kW. DT has an annual base case production of 1.32 GWh. The power plant commenced commercial operation in April 2011 and was purchased by the Group in the second quarter of 2015.
7.4.5.4 Narni (Collesanto S.r.l) The power plant named Collesanto Narni, owned by the SPV Collesanto S.r.l, is located in the municipality of Narni in the Umbria region. The solar park is ground mounted and has an installed capacity of 990 kW. The annual base case production is 1.39 GWh. The power plant commenced commercial operation in January 2011 and was purchased by the Group in the second quarter of 2015.
7.4.5.5 Porchiano /Amelia (Collesanto S.r.l) Collesanto S.r.l also owns the power plant named Porchiano located in the municipality of Amelia in the Umbria region. The solar park is ground mounted and has an installed capacity of 997.6 kW. The annual base case production is 1.39 GWh. The power plant commenced commercial operation in April 2011 and was purchased by the Group in the second quarter of 2015.
7.4.5.6 Magnacavallo (JER-12 S.r.l) The power plant named Magnacavallo, owned by the SPV JER-12 S.r.l, is located in the municipality of Magnacavallo in the Lombardia region. The solar park is ground mounted and has an installed capacity of 992.64 kW. Magnacavallo has an annual base case production of 1.17 GWh. The power plant commenced commercial operation in April 2011 and was purchased by the Group in the second quarter of 2015.
7.4.5.7 Piano Molini (Piano Molino S.r.l) The power plant named Piano Molino, owned by the SPV Piano Molino S.r.l, is located in the municipality of Casoli in the Abruzzo region. The solar park is ground mounted and has an installed capacity of 999.58 kW. Piano Molino has an annual base case production of 1.33 GWh. The power plant commenced commercial operation in December 2009 and was purchased by the Group on 24 June 2016.
7.5 Material contracts Save for the Solex Agreement described in Section 16, no company in the Group is a party to any material contract entered into outside the ordinary course of business for the two years prior to the date of this Prospectus. Further, no
35 company in the Group has entered into any other contract outside the ordinary course of business, which contains any provision under which any member of the Group has any material obligation or entitlement.
7.6 Environment The Group's waste management will be done within current regulations, and there is no danger of emissions from SPPs. Material recycling value is expected to exceed the dismantling and recycling cost.
There are no environmental issues that may affect the Group's utilisation of the tangible fixed assets.
7.7 Legal proceedings The Company holds 100,000 shares in the listed company Wilson ASA. In accordance with the Norwegian Public Limited Liability Companies Act, which requires a majority owner with a holding of more than 90% of the shares to buy the remaining shares if required by any of the minority shareholders, the Company has required the majority owner of Wilson ASA to buy the remaining shares. The majority owner has confirmed that it is required to do so. However, there is a dispute regarding the valuation of the shares. The Company is of the opinion that the fair value is around NOK 22- 23 per share, consistent with Wilson ASA's booked equity, while the offer from the majority owner initially was NOK 12 per share. A case of valuation was held in the Haugaland court of first instance in April 2016 and on 6 May 2016 the court determined the value to be NOK 10.60 per share. The court also decided that the Company should bear its own and the other party’s costs in relation to the case. The Company appealed the decision and the appeal hearing was held 7-8 March 2017 in Gulating Court of Appeal. The Company is waiting for the ruling. In the Interim Financial Statements, a value of NOK 10.60 per share has been used and a provision for potential case costs has been made
The Group is currently involved in a tax dispute with the Italian tax authorities with respect to two of the Group's Italian subsidiaries. Italian tax authorities have claimed repayment from the Group of approximately EUR 630,000. The Group has disputed the claim and negotiations with the Italian tax authorities have been initiated with a view to reaching a settlement. The Group’s view is that any liability deriving from said claims is covered by the warranties provided for in the share purchase agreements signed with the seller of the relevant plants.
The Company has responded to questions received from Norwegian tax authorities regarding the handling of running costs for portfolio management for the period 2012-2014. At the time, the Company was a portfolio management company investing mainly in listed securities in the Nordic region. The tax authorities deem that portfolio management costs should be treated as acquisition costs (non-deductible) as opposed to deductible operational costs. The Company disagrees with the tax authorities’ assessment. The Company has not made provisions for a potential penalty tax, but the Company's own process costs are booked as they accrue.
From time to time, the Group may become involved in litigation, disputes and other legal proceedings arising in the normal course of business. Such claims, even if lacking merit, could result in the expenditure of significant financial and managerial resources. Other than as described above, the Group is not, nor has it been during the course of the preceding 12 months, involved in any legal, governmental or arbitration proceedings which may have, or has had in the recent past, significant effects on the Group's and/or the Group's financial position or profitability, and the Group is not aware of any such proceedings which are pending or threatened.
7.8 Dependency on contracts, patents, licenses etc. Save for the Group’s dependency on government subsidies, incentives and supportive regulatory framework as described in Section 2.1.1, it is the Company’s opinion that the Group’s existing business or profitability is not dependent upon any contracts. It is further the opinion of the Company that the Group’s existing business or profitability is not dependent on any patents or licenses.
7.9 Principal Investments 7.9.1 Principal investments before the Group’s acquisition of Aega Yieldco AS For a description of the Company's principal investments before the Acquisition, reference is made to the annual financial statements for the Group as of and for the year ended 31 December 2014 and 2015 incorporated by reference in hereto, see Section 17.3 “Incorporation by reference”.
7.9.2 Acquisition of Aega Yielco AS On 20 January 2016 Nordic Financial ASA (now Aega) signed the final share purchase agreement with the existing shareholders of Yieldco. The consideration has been paid by issuance of consideration shares in Aega. For accounting purposes Aega Yieldco AS is considered the acquirer. The total value of the consideration shares was estimated to EUR 6,890,000. See section 7.2 for more information (for information regarding Aega Yieldco’s acquisition of the individual 36 solar parks, see note 6 in the Company’s interim report for the first quarter of 2016 (incorporated by reference in hereto, see Section 17.3)
7.9.3 Acquisition of Piano Mulino S.r.l Aega ASA acquired Piano Mulino S.r.l in its entirety on 24 June 2016. The acquisition amount was EUR 1,200,000 for the corporate capital. See section 7.3.2 for more information.
7.9.4 Acquisition of certain assets from Solex On 31 January 2017 Aega completed the acquisition of certain assets from Solex. As consideration for the acquired assets Aega paid a purchase price of NOK 11,000,000 to be settled in the form of the Consideration Shares and Warrants. See section 16.1 for more information.
7.9.5 Principal future investments Going forward, the Company aims to grow through acquisitions of new solar parks. Whenever firm commitments to acquire solar parks are made, the Company will publish a separate stock exchange notice.
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8 CAPITALISATION AND INDEBTEDNESS
8.1 Capitalisation and indebtedness The tables below should be read in conjunction with the information included elsewhere in this Prospectus, including Section 9 "Selected financial and other information" and the Financial Statements incorporated by reference hereto, see Section 17.3 "Incorporation by reference".
The tables set forth the unaudited capitalisation and net financial indebtedness of the Group on an actual basis as at 31 December 2016. They also provide adjustments to the net financial indebtedness due to the Private Placement and the Solex Transaction.
Except from the Private Placement (see section 15) and the Assumed Liabilities in connection with the Solex Transaction (see section 16), there has been no material changes to the Group’s capitalisation and net financial indebtedness since 31 December 2016.
As security for the secured debt there has been given pledges on the respective solar power plant and the shares of SPV’s owning the solar power plants.
As of Purchase of 31 December Private assets from Capitalisation 2016 Placement Solex As adjusted In EUR Actual Provisional Provisional Provisional (uaudited) (uaudited) (uaudited) (uaudited)
Note 1 (only related to Note 2 Note 3 secured indebtedness) Indebtedness Total current debt ...... 2,294,123 - 686,7053 2,980,828 - Guaranteed ...... - - - - - Secured (see Note 1 below the table), ...... 941,4991 - - 941,499 - Unguaranteed/unsecured ...... 1,352,625 - 686,7053 2,039,330
Total non-current financial debt ...... 10,223,297 - - 10,223,297 - Guaranteed ...... - - - - - Secured (see Note 1 below the table), ...... 10,223,2971 - - 10,223,297 - Unguaranteed/unsecured - - - - ...... Total indebtedness ...... 12,517,421 - 686,705 13,204,126
Shareholders’ equity
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As of Purchase of 31 December Private assets from Capitalisation 2016 Placement Solex As adjusted In EUR Actual Provisional Provisional Provisional (uaudited) (uaudited) (uaudited) (uaudited) a. Share capital ...... 3,823,384 554,4962 337,7243 4,715,604 b. Additional paid-in capital ...... 6,929,054 1,009,1832 675,4473 8,613,684 c. Legal reserve - - - - ...... d. Cumulative transactions adjustment - - - - ...... e. Retained earnings ...... (4,583,624) - - - Total equity ...... 6,168,815 1,563,678 1,013,171 8,745,664 Total capitalisation ...... 18,686,235 1,563,678 1,699,876 21,949,790
Indebtedness As of Purchase of assets
In EUR 31 December 2016 Private Placement from Solex As adjusted Actual Provisional Provisional Provisional (uaudited) (uaudited) (uaudited) (uaudited)
Net indebtedness (A) Cash ...... 688,104 1,563,6782 - 2,251,783 (B) Cash equivalents ...... - - - - (C) Interest bearing receivables ...... - - - - (D) Liquidity (A)+(B)+(C) 688,104 1,563,678 - 2,251,783 ......
(E) Current financial receivables ...... - - - -
(F) Current bank debt ...... - - - - (G) Current portion of long-term debt ...... 941,499 - - 941,499 (H) Other current financial liabilities 3 ...... 1,352,625 - 686,705 2,039,330 (I) Current financial debt (F)+(G)+(H) ...... 2,294,123 - 686,705 2,980,828
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Indebtedness As of Purchase of assets
In EUR 31 December 2016 Private Placement from Solex As adjusted Actual Provisional Provisional Provisional
(uaudited) (uaudited) (uaudited) (uaudited) (J) Net current financial indebtedness (I)-(E)- (D) ...... 1,606,019 -1,563,678 686,705 729,046
(K) Long-term interest bearing debt ...... 10,223,297 - - 10,223,297 (L) Bonds issued ...... - - - - (M) Other non-current financial liabilities ...... - - - - (N) Non-current financial indebtedness (K)+(L)+(M) ...... 10,223,297 -1,563,678 686,705 10,952,343
(O) Net financial indebtedness (J)+(N) ...... 11,829,317 -1,563,678 686,705 10,952,343
Notes: Note 1: Each of the Group’s solar power plants are financed with debt. As security the financing, institutions have pledges on the respective solar power plants and the shares of the SPV owning the plant
Note 2: Following the Private Placement the Company issued 4,991,184 new shares, each with a subscription price of NOK 3.00, and received net proceeds of EUR 1,563,678. The nominal value per share was NOK 1.00, increasing the Company’s share capital with EUR 554,496. The remainder (EUR 1,009,183) increased the Company’s additional paid- in capital (share premium fund).
Note 3: Related to the Solex Transaction 3,000,000 Consideration 'shares and 2,000,000 Warrants were issued and the Company undertook to assume liabilities of approximately EUR 686,705 (see Sections 16.1 and 16.2).
8.2 Working capital statement The Company is of the opinion that the working capital available to the Group is sufficient for the Group’s present requirements, for the period covering at least 12 months from the date of this Prospectus.
8.3 Contingent indebtedness As of 31 December 2016 and as of the date of the Prospectus, the Group did not have any contingent or indirect indebtedness.
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9 SELECTED FINANCIAL AND OTHER INFORMATION The following tables present selected Financial Information in respect of the Group. Unless otherwise stated herein, the selected financial information as of and for the financial periods ended 31 December 2014 and 2015, and the selected interim financial information for the year ended 31 December 2016 and for the fourth quarter of 2016, have been derived from and are based on the Financial Statements and the Interim Financial Statements, respectively.
The tables below also set out the unaudited financial figures for Yieldco’s business (the Company acquired Yieldco on 20 January 2016 in a reverse takeover transaction, see section 7.2 for more information) for the year ended 31 December 2015 and for the fourth quarter ended 31 December 2015. These figures are derived from the Company’s interim report for the fourth quarter of 2016 and are included for comparison purposes. The selected financial information should be read in connection with and is qualified in its entirety by reference to the Financial Statements and the Interim Financial Statements, hereunder the auditor’s reports and accounting policies, incorporated by reference hereto, see Section 17.3 "Incorporation by reference".
The Company decided to change the reporting currency from NOK to EUR with effect from 1 January 2016 due to the change of business of the Company following the Acquisition. For this reason, the tables presenting the Financial Statements (financial periods ended 31 December 2014 and 2015) and the tables presenting the Interim Financial Statements (financial period ending 31 December 2016, and the fourth quarter of 2016) are separated below. In addition, and as shown in the tables below, the change of business of the Company has also resulted in change of itemisation in the accounts with effect from 1 January 2016. It should be noted that Financial Statements are not directly comparable to the Interim Financial Statements since the Company changed its strategic direction from financial investments to investments in secondary solar parks in Italy following the Acquisition.
9.1 Statement of income The table below sets out selected data from the Group’s audited statement of income for the years ended 31 December 2014 and 2015.
In NOK Year ended 31 December
2015 2014 (audited) (audited)
Revenue Interest 22,085 289,590 income ...... Received 50,000 2,660,350 dividends ...... Fair value gains/(losses) on financial assets at fair value through profit or 651,985 -5,140,556 loss ...... Net 724,070 -2,190,616 revenue ...... Operating cost Management 0 -722,758 services ...... Administrative 858,188 2,334,465 expenses ...... Total operating 858,188 1,611,707 cost ...... Operation -134,118 -3,802,323 profit ......
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Finance -160,000 -391,940 cost ...... Profit before income -294,118 -4,194,263 tax ...... Income tax 0 0 expense ...... Profit for the -294,118 -4,194,263 period ...... Other comprehensive income Other comprehensive 0 0 income ...... Total comprehensive income for the -294,118 -4,194,263 period ...... Earnings per share Continuing operations Basic = -0.13 -1.90 Diluted ......
The table below sets out selected data from the Group’s unaudited statement of income for the year ended 31 December 2016. The table below also sets out the unaudited financial figures for the year ended 31 December 2015. These figures are from Yieldco’s business (Yieldco was acquired on 20 January 2016, see section 7.2 for more information) and are included for comparison purposes.
Year ended In EUR 31 December
2016 2015
(unaudited) (unaudited)
Feed-In Tariff revenue ...... 2,030,159 799,831
Sales of electricity ...... 294,062 140,314
Other revenue ...... 81,971 2,049
Revenues ...... 2,406,192 942,194
Cost of operations ...... (316,257) (90,146)
Sales, general and administration expenses ...... (1,114,276) (172,745)
Acquisitions and transaction costs ...... (1,196,872) (431,653)
EBITDA ...... (221,213) 247,650
Depreciation, amortizations and write downs ...... (998,427) (373,613)
Other Operating profit before OGL (EBIT) ...... (1,219,640) (125,963)
Finance income ...... 2,294 17,692
Finance costs ...... (560,502) (262,750) Mark to market adjustment derivatives ...... 46,079 24,839 Net foreign exchange gain/(losses) ...... (71,825) 165,836
Net financial items ...... (583,954) (54,383)
Profit before income tax ...... (1,803,594) (180,346)
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Year ended In EUR 31 December
2016 2015
(unaudited) (unaudited)
Income tax gain/(expense) ...... 41,174 (180,469)
Profit/(loss) for the period ...... (1,762,421) (360,816)
Other comprehensive income
Translation differences ...... (226,129) 242,289
Other comprehensive income net of tax ...... (226,129) 242,289
Total comprehensive income ...... (1,988,550) (118,526)
Profit for the period attributable to:
Equity holders of the parent company ...... (1,762,421) (360,816)
Total comprehensive income attributable to:
Income allocated to equity holders of the company ...... (1,988,550) (118,526)
Earnings per share ...... (0.06) (0.086)
Avg. no. of shares ...... 31,078,951 1,382,798
The table below sets out selected data from the unaudited statement of income for the Group for the fourth quarter ended 31 December 2016. The table below also sets out unaudited financial figures for the fourth quarter ended 31 December 2015. These figures are from Aega Yieldco AS’s business (Aega Yieldco AS was acquired on 20 January 2016, see section 7.2 for more information) and are included for comparison purposes.
In EUR Q4 ended 31 December 2016 2015
(unaudited) (unaudited)
Feed-In Tariff revenue ...... 366,447 259,977
Sales of electricity ...... 60,910 36,969
Other revenue ...... 70,444 2,049
Revenues ...... 497,801 298,995
Cost of operations ...... (133,999) (31,858)
Sales, general and administration expenses ...... (190,802) (49,998)
Acquisitions and transaction costs ...... 25,075 (410,955)
EBITDA ...... 198,075 (193,816)
Depreciation, amortizations and write downs ...... (296,134) (197,567)
Other Operating profit before OGL (EBIT) ...... (98,059) (391,383)
Finance income ...... - 17,690
Finance costs ...... (154,374) (159,129) Mark to market adjustment derivatives ...... 132,314 1,035 Net foreign exchange gain/(losses) ...... 35,642 106,653
Net financial items ...... 13,582 (33,751)
Profit before income tax ...... (84,477) (425,134)
Income tax gain/(expense) ...... 25,693 (160,292)
Profit/(loss) for the period ...... (58,784) (585,426)
Other comprehensive income
Translation differences ...... 484,346 358,499
Other comprehensive income net of tax ...... 484,346 358,499
Total comprehensive income ...... 425,562 (226,926)
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In EUR Q4 ended 31 December 2016 2015
(unaudited) (unaudited)
Profit for the period attributable to:
Equity holders of the parent company ...... (58,784) (585,426)
Total comprehensive income attributable to:
Income allocated to equity holders of the company ...... 425,562 (226,926)
Earnings per share ...... 0.01 (0.076)
Avg. no. of shares ...... 35,890,957 2,978,193
9.1.1 General Following the Acquisition, 80-90% of the Group's cash flow is from the FiT. The incentive is paid in equal instalments each month based on 90% of a basis production by the GSE. In June/July the following year the Group receives the difference between the payments received by the GSE and the actual production multiplied by the FiT. The Group's main costs are financing costs. Operational costs are mainly regulated by long term fixed price contracts.
9.1.2 The fourth quarter of 2016 compared to the fourth quarter of 2015 Total revenues in the fourth quarter of 2016 were EUR 497,801 compared to EUR 298,995 in the same period the year before. At the end of the fourth quarter of 2016, the Company had six solar parks under operation compared to five (one solar park was acquired during the quarter) at the end of the fourth quarter of 2015. Total electricity production was 1,327 MWh in the fourth quarter of 2016 compared to 996 MWh the same period last year. Total operation costs (excluding acquisition and transaction costs) were EUR 620,935 in the fourth quarter of 2016 compared to EUR 279,423 in the same period the year before. The increase in costs is related to higher activity which led to higher costs. Acquisition and transaction costs/income (non-recurring) were positive EUR 25,075 compared to negative EUR 410,995 in the same period the year before. The gain in the fourth quarter of 2016 was a result of the Company’s registration in the Norwegian VAT register. Therefore, a reversal of previously expensed VAT had effect in the fourth quarter of 2016. Acquisition and transaction costs of EUR 410,955 in the fourth quarter of 2015 are mainly related to transaction costs in connection with Aega Yieldco’s acquisition of Aega Energy Prima AS, Aega Seconda AS and Aega Terza AS (see note 6 in the Company’s interim report for the first quarter of 2016 for more information (incorporated by reference in hereto, see Section 17.3). Net financial items was positive EUR 13,582 in the fourth quarter of 2016 compared to negative EUR 33,751 in the same period last year. The change from the last period is mainly attributable to positive adjustment of financial derivatives which is valued at current market value. The derivatives are held to fix the interest rate. Net profit for the fourth quarter of 2016 came in at negative EUR 58,784 compared to negative EUR 585,426 in the fourth quarter of 2015. The increase from the same period the year before is mainly a result of significantly lower Acquisition and transaction costs and a tax gain compared to a tax expense in the same period last year.
9.1.3 The year ending 31 December 2016 compared to the year ending 31 December 2015 During 2016, total revenues were EUR 2,406,192 compared to EUR 942,194 the year before. The increase in revenue is attributable to a larger portfolio of solar parks. At the end of 2015, the Group had revenues from five solar parks (four parks was acquired during the second quarter of 2015, see section 7.3.5 for more information), while at the end of the fourth quarter of 2016 the company owned and operated six solar parks. The increased operations lead to higher depreciation and activity in 2016 compared to 2015. Total operation costs (excluding acquisition and transaction costs) were EUR 2,428,960 in 2016 compared to EUR 636,504 in 2015. The increase in costs is related to higher activity which led to higher costs. In 2016 the Group had non-recurring costs related to new investments and financing activities (acquisition and transaction costs) of EUR 1,196,872 compared to EUR 431,653 in 2015. The acquisition and transaction costs in 2016 was affected by significant costs related to due diligence of a 14 MW portfolio not being purchased in addition to funding & IPO costs. Net financial items were negative EUR 583,954 in 2016 compared to negative EUR 54,383 the same period the year before. The increase in net financial items is primarily a result of higher finance costs in 2016 compared to 2015. Higher finance costs is a result of owning more solar parks financed with debt capital, increasing the Company’s interest payments. In addition, the Company booked a net foreign exchange loss in 2016, whereas the company had a net foreign exchange profit in 2015. Net profit for the year 2016 came in at negative EUR 1,762,421 compared to negative EUR 360,816 in 2015. The decrease in net profit in 2016 compared to 2015 is mainly related to significantly higher acquisition and transaction costs in 2016 compared to 2015. Translation differences and Net foreign exchange gain/(losses) are both dependent on the development of the exchange rate EUR/NOK. In January 2015 one EUR was worth 9,0475 NOK, however, it increased to 9,6190 NOK at the end of 2015. At the end of 2016 it was back again to beginning of 2015 levels of 9,0863.
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9.1.4 The year ending 31 December 2015 compared to the year ending 31 December 2014 It should be noted that the Financial Statements for 2014 and 2015 as discussed in this section are not directly comparable to the Interim Financial Statements since the Company changed its strategic direction from making financial investments to investments in secondary solar parks in Italy following the Acquisition.
The statement of income for 2015 showed a loss of NOK 294,118 after tax, compared to a loss of NOK 4,194,263 for 2014. The loss in 2015 was mainly due to shortcoming of revenues from the investment portfolio compared to the cost of operations. Revenues from the investment portfolio were NOK 724,070 in 2015, compared to a loss of NOK 2,190,616 for 2014. Total operating costs were NOK 858,188 and NOK 1,611,707 in 2015 and 2014, respectively. The main reason for the reduction in operating costs was due to a termination of an investment management agreement which led to substantial costs in 2014. In addition, the reduction of activities led to lower administrative costs.
9.2 Statement of financial position The table below sets out selected data from the Company’s audited statement of financial position as of 31 December 2015 and 2014.
As of In NOK 31 December
2015 2014
(audited) (audited) Assets Current assets Financial assets at fair value through profit or loss ...... 1,475,475 - Prepayments and other receivables ...... 16,541 15,688 Unsettled trades ...... 1,083,839 - Cash and cash equivalents ...... 899,864 3,901,726 Total assets ...... 3,475,719 3,917,413 Equity and liabilities Equity Share capital ...... 2,209,020 2,209,020 Other reserves ...... 939,217 1,233,335 Total equity ...... 3,148,237 3,442,335 Current liabilities Trade and other payables ...... 327,482 475,058 Total current liabilities ...... 327,482 475,058 Total equity and liabilities ...... 3,475,719 3,917,413
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The table below sets out selected data from the Group’s unaudited interim statement of financial position as of 31 December 2016. The table below also sets out the unaudited financial position as of 31 December 2015. These figures are from Aega Yieldco AS’s business (Aega Yieldco AS was acquired on 20 January 2016, see section 7.2 for more information) and are included for comparison purposes.
As of In EUR 31 December
2016 2015
(unaudited) (unaudited) ASSETS Property, plants and equipment ...... 14,894,551 13,017,982 Intangible assets and DTA ...... 384,059 539,848 Other long term assets ...... - - Non-current assets ...... 15,278,610 13,557,831 Receivables ...... 1,033,022 627,660 Other current assets ...... 1,686,519 893,532 Cash and short term deposits ...... 688,104 1,387,494 Current assets ...... 3,407,625 2,908,685 TOTAL ASSETS ...... 18,686,234 16,466,516 EQUITY AND LIABILITIES Share capital ...... 3,823,384 60,442 Share premium ...... 6,879,843 5,090,574 Other paid in equity ...... 49,211 (260,655) Paid in capital ...... 10,752,438 4,890,361 Accumulated profit & loss ...... (3,599,784) (451,201) Other equity ...... - - Foreign Currency translation reserve ...... 16,160 242,289 Other equity ...... (4,583,624) (208,911) Total equity ...... 6,168,815 4,681,449 Long term 3,028,157 3,185,958 46
As of In EUR 31 December
2016 2015
(unaudited) (unaudited) loans ...... Leasing ...... 7,195,140 6,249,475 Other long term debt ...... - - Total non-current liabilities ...... 10,223,297 9,435,433 Trade payables and other payables ...... 581,148 786,024 Short term financing – interest bearing ...... 941,499 772,214 Derivative financial instruments ...... 771,477 791,395 Other current liabilities ...... - - Total current liabilities ...... 2,294,123 2,349,634 Total liabilities ...... 12,517,421 11,785,066 TOTAL EQUITY AND LIABILITIES ...... 18,686,235 16,466,516
9.2.1 Financial position as of 31 December 2016 compared to 31 December 2015 Total assets increased from EUR 16,466,516 in 2015 to EUR 18,686,234 in 2016. The main reason for the increase is the purchase of the solar power plant Piano Mulino (see section 7.3 for more information). Total equity increased with EUR 1,487,366 to EUR 6,168,815. The increase in equity is due to 1) acquisition of Nordic Financials resulting in an increase in equity of EUR 932,169, 2) a capital increase of EUR 2,751,590 conducted in the second quarter of 2016, and 3) policy changes and other of EUR 162,121, partly offset by 1) distributions to shareholders of EUR 416,045, 2) loss in the period of EUR 1,762,421, and 3) other comprehensive income of negative EUR 180,050. Total liabilities increased from EUR 16,466,516 in 2015 to EUR 18,686,234 in 2016. The increase is a result of additional finance lease following the purchase of solar power plant Piano Mulino (see section 7.3 for more information).
9.2.2 The year ending 31 December 2015 compared to the year ending 31 December 2014 It should be noted that the Financial Statements for 2014 and 2015 as discussed in this section are not directly comparable to the Interim Financial Statements since the Company changed its strategic direction from making financial investments to investments in secondary solar parks in Italy following the Acquisition.
At year-end 2015, the Company had financial investments valued at NOK 1,404,897. At the end of 2014, the Company had no financial investments. Total assets were NOK 3,475,719 at year-end 2015, compared to NOK 3,917,413 in 2014. The Company had no debt to financial intuitions neither at the end of 2015 nor at the end of 2014. Cash and cash equivalents was NOK 899,864 at the end of 2015, compared to NOK 3,901726 one year prior. Total equity was NOK 3,148,237 at year-end 2015 compared to NOK 3,422,355 one year prior. No dividends were paid in 2015.
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9.3 Statement of cash flow The table below sets out selected data from the Group’s audited statements of cash flows for the years ended 31 December 2015 and 2014.
Year ended In NOK 31 December
2015 2014
(audited) (audited) Cash flows from operating activities Profit before income tax ...... -294,118 -4,194,263 Recognised dividends ...... -50,000 -2,660,350 Received dividends ...... 50,000 2,660,350 Unrealized gains and losses on financial assets at fair value through profit or loss ...... -258,606 - Interest charged as cost ...... 160,00 315,207 Net payments for financial assets at fair value through profit or loss ...... -2,300,708 192,002,707 Change in accounts payable ...... -147,576 -3,784,998 Change in other items ...... -854 131,100 Net cash inflow from operating activities ...... -2,841,862 184,469,753
Cash flows from financing activities Net change in borrowings ...... - -92,629,801 Interest paid ...... -160,000 -395,926 Dividends paid ...... 0 -92,778,840
Net cash (outflow) from financing activities -159,999 -185,804,567
Net increase (decrease) in cash and cash equivalents ...... -3,001,861 -1,334,814 Cash and cash equivalents at the beginning of the financial year ...... 3,901,726 5,236,540 Cash and cash equivalents at end of year ...... 899,865 3,901,726
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The table below sets out selected data from the Group’s unaudited interim statements of cash flow for the fourth quarter ended 31 December 2016. The table below also sets out financial figures for the fourth quarter ended 31 December 2015. These figures are from Aega Yieldco AS’s business (Aega Yieldco AS was acquired on 20 January 2016, see section 7.2 for more information) and are included for comparison purposes.
In EUR Q4 ending 31 December 2016 2015
(unaudited) (unaudited) Ordinary profit before tax ...... (84,477) (426,169) Paid income tax ...... - - Depreciation ...... 296,134 197,567 Write down ...... - - Changes in receivables and trade payable ...... 168,186 47,630 Changes in other accruals ...... (366,172) 399,474 Cash flow from operations 13,671 218,502 ......
Acquisition of subsidiary, net of cash acquired ...... - 1,125,578 Cash flows from investments ...... - 1,125,578
Proceeds from issue of share capital ...... - - Dividends or shareholder distributions ...... (118,500) (141,581) Proceeds from new loans ...... - - Repayment of loans ...... (221,115) (99,934) Cash flow from financing ...... (339,615) (241,516)
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In EUR Q4 ending 31 December 2016 2015
(unaudited) (unaudited) Cash at beginning of period ...... 1,014,049 284,930 Currency translation effect ...... - - Net increase/(decrease)in cash and cash equivalents ...... (325,945) 1,102,564 Cash end of period ...... 688,104 1,387,494
9.4 Statement of changes in equity The table below sets out selected data from the Company’s audited statements of changes in equity for the year ended 31 December 2015.
In NOK
Share capital Share premium Other reserves Total equity
Balance at 1 January 2014 (audited) 2,209,020 0 98,206,438 100,415,458
Profit for the period ...... 0 0 -4,194,263 -4,194,263 Dividends paid 0 0 -92,778,840 -92,778,840 ...... Balance at 31 December 2014 (audited) ...... 2,209,020 0 1,233,335 3,442,355 Profit for the period ...... 0 0 -294,118 -294,118 Balance at 31 December 2015 (audited) ...... 2,209,020 0 939,217 3,148,237
The table below sets out selected data from the Group’s unaudited interim statements of changes in equity for year ended 31 December 2016.
Foreign
In EUR Share currency Share premium Other paid translation capital fund in equity Other equity reserve Total equity
Equity as at 31 December 2015 60,442 5,090,574 (260,655) (451,201) 242,289 4,681,449 Acquisition of NOFIN, inc. Increase denomination ...... 2,845,745 251,619 309,866 (2,475,061) 932,169 Dividends or distribution to shareholders ...... (296,743) (119,302) (416,045) Capital increase 30.5.2016 ...... 917,197 1,834,393 2,751,590 Profit (loss) after (1,762,421) (1,762,421) 50
Foreign
In EUR Share currency Share premium Other paid translation capital fund in equity Other equity reserve Total equity
tax ...... Other comprehensive income ...... 46,079 (226,129) (180,050) Policy changes and other ...... 162,121 162,121 Equity as at 30 September 2016 (unaudited) ...... 3,823,384 6,879,843 49,211 (4,599,785) 16,160 6,168,813
9.5 Cash flow information 9.5.1 The fourth quarter of 2016 compared to the fourth quarter of 2015 In the fourth quarter of 2016, the cash flow from operations was EUR 13,671 compared to EUR 218,502 in the fourth quarter of 2015. The decrease in cash flow from operations in the fourth quarter of 2016 compared to the year before was mainly attributable to higher revenues and lower acquisition and transaction costs (non-recurring). At the end of the fourth quarter of 2016, the Company had six solar parks under operation compared to five in the fourth quarter of 2015. The corresponding electricity production was 1,327 MWh in the fourth quarter of 2016 compared to 996 MWh in the same period the year before. Acquisition and transaction costs amounted to EUR 410,955 in the fourth quarter of 2015, whereas the Group realized a gain of EUR 25,075 in the fourth quarter of 2016. The gain was a result of the Company’s registration in the Norwegian VAT register. Therefore, a reversal of previously expensed VAT had effect in the fourth quarter of 2016. Cash flow from investing activities was nil in the fourth quarter of 2016 and EUR 1,125,578 in the same period the year before, due to the Acquisition. Cash flow from financing was negative EUR 339,615 in the fourth quarter of 2016 and negative EUR 241,516 in the fourth quarter of 2015. The increased negative cash flow from investing activities in the fourth quarter of 2016 compared to the same period the year before was primarily due to increased repayments of debt, partly offset by lower dividends distributed to the shareholders. The net cash flow in the fourth quarter of 2016 was negative EUR 325,945, whereas the net cash flow for the fourth quarter of 2015 was positive EUR 1,102,565.
9.5.2 The year ending 31 December 2015 compared to the year ending 31 December 2014 Due to downsizing of the operations in 2014, the 2015 net cash inflow from operating activities was reduced to NOK - 2,841,862 from NOK 184,469,753 in 2014. The positive operational cash flow in 2014 mainly comes from sale of almost all of the financial assets of the Company. In 2015, the Company bought financial assets for NOK 2,300,708, affecting the operational cash flow negatively.
The cash flow from financing activities was NOK -159,999 in 2015 compared to NOK -185,804,567 in 2014. After the aforementioned sale of financial assets in 2014, the Company repaid most of its outstanding debt amounting to NOK 92,629,801. In addition, the proceeds from the sale were used to distribute dividends of NOK 92,778,840.
9.5.3 General The cash flow from operations has increased during 2016 due to having on average 5.5 MW compared to average 3.5 MW. However, it has also resulted in larger cash outflows for interest payments and repayments of loans and leasing.
At the end of 2016, the Company had a cash balance of EUR 688,104, down from EUR 1,387,494 the year before. It should be noted that the proceeds from the Private Placement completed in December 2016 (see section 15) was transferred to the Company in January 2017 and is not included in the cash balance at the end of 2016. Including the proceeds from the Private Placement, the cash balance is approximately EUR 1,600,000 million higher than reported at the end of 2016. Except from the Private Placement there has been no material changes to the Company’s cash balance from the end of 2016 to the date of this prospectus
Except from EUR 100,000 of which is restricted in one of the subsidiaries in Italy, all cash are freely transferable within the Group.
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9.6 Off-balance sheet arrangements As of 31 December 2016, the Group did not have any material off-balance sheet obligations that were not reflected in its Financial Statements at such date.
9.7 Trend information The market price of electricity has decreased from about 80 EUR/MWh in 2008 to about 40 EUR/MWh in 2016. The price has picked up somewhat in the beginning of 2017 with a price of 55 EUR/MWh year to date (as of February). When purchasing new solar parks the Company uses an energy price of 40 EUR/MWh without any inflation adjustment in its calculations. For a solar park in Italy of 1 MW, revenues from sale at market price of 40 EUR/MWh is typically between EUR 50,000 and EUR 75,000 depending on solar irradiation and operational availability of the solar park.
Costs of operating the solar power plants have decreased over the last years from about EUR 85,000 per MW of installed capacity in 2010 to about 55,000 per MW of installed capacity in 2016.
Except from the downward trend in sales price of electricity and the cost of operating solar power plants, the Company is not aware of any trends that has affected the Company’s operations up to the date of this Prospectus, or will affect the Company’s prospects for the current financial year.
9.8 Significant changes Except for the acquisition of Yieldco in January 2016 (see Section 7.2, or prospectus dated 18 August 2016 for further information regarding the Acquisition), the private placement of new Shares in the Company completed in May 2016 (see Section 12.4), the acquisition of a new solar park (Piano Mulino) in June 2016 (see Section 7.3), the completion of the Private Placement (see Section 15) and the completion of the Solex Transaction and the associated termination of the Management Agreements (see Section 16.1), there have been no significant changes in the financial or trading position of the Group which has occurred since 31 December 2015. Moreover, save for the completion of the Solex Transaction and the associated termination of the Management Agreements (see Section 16.1), there have been no significant changes in the financial or trading position of the Group which has occurred since 31 December 2016.
Furthermore, except from the mentioned above, there have been no significant changes impacting the Company’s operations and activities since the latest two published audited financial statements
9.9 Auditor The Company’s auditor is PricewaterhouseCoopers AS (PwC) and its business address is Dronning Eufemias gate 8, 0191 Oslo, Norway. PwC is a member of the Norwegian Institute of Public Accountants (DnR). PwC has been the Company’s auditor since 2011. Accordingly, no auditor of the Group has resigned, been removed or failed to be re-appointed during the period covered by the historical financial information attached hereto. The auditor’s reports on the Financial Statements are included together with the Financial Statements as incorporated hereto by reference, see Section 17.3 “Incorporation by reference”.
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10 BOARD OF DIRECTORS, MANAGEMENT, EMPLOYEES AND CORPORATE GOVERNANCE 10.1 Introduction The General Meeting is the highest authority of the Company. All shareholders in the Company are entitled to attend and vote at General Meetings of the Company and to table draft resolutions for items to be included on the agenda for a General Meeting.
The overall management of the Group is vested in the Company’s Board of Directors and the Group’s management. In accordance with Norwegian law, the Board of Directors is responsible for, among other things, supervising the general and day-to-day management of the Group’s business ensuring proper organisation, preparing plans and budgets for its activities, ensuring that the Group’s activities, accounts and assets management are subject to adequate controls and undertaking investigations necessary to perform its duties.
The management is responsible for the day-to-day management of the Group’s operations in accordance with Norwegian law and instructions set out by the Board of Directors. Among other responsibilities, the Group’s CEO is responsible for keeping the Group’s accounts in accordance with existing Norwegian legislation and regulations and for managing the Group’s assets in a responsible manner. In addition, the CEO must according to Norwegian law brief the Board of Directors about the Group’s activities, financial position and operating results at a minimum of one time per month.
No member of the Company's Board of Directors or the Group's management have any service contracts providing for benefits upon termination of employment except for the CEO who has a pre-agreed compensation equal to 6 months’ salary in event the Company terminates the agreement with him.
10.2 Board of Directors 10.2.1 Overview of the Board of Directors The Company’s Articles of Association provide that the Board of Directors shall consist of a minimum of three and a maximum of eight members ("Board Members"). The current Board of Directors consists of three Board Members, as listed in the table below, See Section 10.2.2 "The Board of Directors". In addition, Lars-Gøran Dysterud Hansen serve as a strategic advisor to the Board of Directors.
The composition of the Board of Directors is in compliance with the independence requirements of the Corporate Governance Code (as defined below), meaning that (i) the majority of the shareholder elected Board Members should be independent of the Company's management and material business contacts, (ii) at least two of the shareholder elected Board Members should be independent of the Company’s main shareholders, and (iii) no members of the management should serve on the Board of Directors.
The Company’s registered business address, Oscars gate 52, 0258 Oslo, Norway serves as the c/o address for the members of the Board of Directors in relation to their directorship of the Company.
10.2.2 The Board of Directors The names and positions of the Board Members are set out in the table below:
Name Position Served since Term expires
Knut Øversjøen Chairman 2016 2018 Geir Upsaker Board member 2016 2018 Anne Young Syrrist Board member 2017 2019
10.2.3 Brief biographies of the Board Members Set out below are brief biographies of the Board Members, including their relevant management expertise and experience, an indication of any significant principal activities performed by them outside the Group and names of companies and partnerships of which a Board Members is or has been a member of the administrative, management or supervisory bodies or partner in the previous five years (not including directorships and executive management positions in subsidiaries of the Company).
From 28 March 2017, Lars-Gøran Dysterud Hansen became a strategic advisor to the board of directors of Aega. A Brief biography of Lars-Gøran Dysterud is also set out below.
Knut Øversjøen, Chairman
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Knut Øversjøen holds a four year program in economics and business administration consisting of three years at bachelor/undergraduate level and one year at master/graduate level from BI Norwegian Business School. He has extensive experience from several directorships and key management positions in both listed and unlisted companies within a wide range of industries. Mr. Øversjøen is currently CEO and major owner in Scandec Systemer, and managing partner in Falcon Industrial Partners. His previous positions include CFO in Hafslund ASA, PGS ASA and Umoe Group, CEO in Kverneland ASA and Global Tender Barges. Mr. Øversjøen is a Norwegian citizen and resides in Oslo, Norway.
Current directorships and senior management positions Managing partner / chairman: Falcon Industrial Partners AS CEO / owner: Scandec Systemer AS, Chairman: AEGA ASA, Relacom Finland ...... Board member of: Relacom AB, Guardian Corporate AS, Spond AS, Asetek, Inc., Scanmar AS, Scan-Sense AS Previous directorships and senior management positions last Board member of: Sparebank 1 MidtNorge, Tennant, Haram Energy, five years CBF energimegling, Unitor, Reinertsen AS, Swan reefer, Umoe Catering, ARD Group, Nli Subsea, Renewable Energy Cooperation (REC), Kverneland AS, Foinco AS ...... Advisory board: Carnegie Investment Bank
Geir Upsaker
Geir Upsaker has been a part of the Aega system since its foundation. He previously held a Board position in NorskSolkraft AS and has an extensive background from the financial services industry, from firms such as Gjensidige NOR, Fellesbanken and Elcon Securities. Mr. Upsaker holds a degree from the University of Karlstad.
Current directorships and senior management Laboremus Eiendom AS (CEO), Rød Gård Holding AS (Chairman), positions Fronco AS (Chairman), Aega ASA (board member) ...... Previous directorships and senior management positions last Gjensidige Nor (Head of proprietary Trading), Elcon Securities (Head fiveyears of fixed income), Fellesbanken (Deputy General Manager), AEGA Solar AS (board member) ......
Anne Young Syrrist
Anne Syrrist holds a Master of Science from NTH and an Executive MBA within Financial Management from NHH. Syrrist has nearly 20 years experience from business development & advisory from various roles within management consulting (BCG), venture capital investments (Convexa), corporate development (Lindorff & Carlsberg) and for the last four years leadership advisory with Amrop. Syrrist has held various board positions roles previously in her career, in both listed and non-listed companies. Syrrist currently leads business development in Haugen-Gruppen AS, a leading Nordic distributor of food and beverage to the retail and foodservice market.
Current directorships and senior management Aega ASA (board member), Haugen-Gruppen AS (head of business positions development) ...... Previous directorships and senior management positions last Ringnes AS (Business Development Director), Sensonor Technologies five AS (CFO), Amrop (Partner) years ......
Strategic advisors to the Board of Directors
Lars-Gøran Dysterud Hansen
Lars Dysterud Hansen has worked in the solar energy industry in Italy since 2003. He was one of the founders of Norsk Solkraft, a pioneer in developing, constructing and operating solar power plants. Norsk Solkraft also developed mounting structures, panel cooling systems etc. He was a participating in establishing Intpow (Norwegian Renewable Energy Partners) together with Statkraft and other major energy companies, being a board member for many years. In 2013, Lars co-founded Aega and has hold several board and director positions in the group.
Current directorships and senior management AEGA ASA (Strategic advisor to the board of directors) positions ......
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Previous directorships and senior management positions last Aega ASA (COO), Aega Solar AS (Founder, COO and Board member), five years
......
10.3 Management 10.3.1 Overview The Company has two employees and six consultants. The management of the Company consist of the CEO, Rolf M. Normann (engaged within the group since October 2016) and CFO Markus H. Enge (engaged since January 2016).
Aega has outsourced the accounting services to Plusser AS, an external certified accounting firm. The assignment is governed by an engagement letter and the remuneration is based on an agreed hourly fee which is on market terms and considered suitable for the services provided.
Plusser AS is not entitled to any other forms of remuneration or any additional remuneration and the Company does not have any share-based incentive schemes.
10.3.2 Brief biographies of the member of management Set out below are brief biographies of the management, including their relevant management expertise and experience, an indication of any significant principal activities performed by them outside the Group and names of companies and partnerships of which they are or have been a member of the administrative, management or supervisory bodies or partner the previous five years (not including directorships and executive management positions in subsidiaries of the Company).
Rolf Marthin Normann
Rolf M. Normann holds an MSc in Mechanical Engineering from the Norwegian University of Science and Technology and an Executive MBA from the Norwegian Business School (BI, Oslo)/Nanyang Technological University (NTU, Singapore). The majority of his career has been within the oil & gas sector where he has had several key roles within READ Group, Heerema Fabrication Group and BW Offshore before joining Fred. Olsen Energy ASA in 2012. Rolf has extensive international experience, and has lived and worked in Singapore, Korea and the USA. Since 2013, he has worked within renewable energy – focusing on offshore wind and heading the Fred. Olsen Ocean group of companies until joining AEGA Solar AS in October 2016 and subsequently AEGA ASA since February 2017.
Current directorships and senior management AEGA ASA (CEO) positions ...... Previous directorships and senior management positions last Aega Solar AS (CEO), Fred. Olsen Ocean Ltd. (CEO), Fred. Olsen Ocean five years AS (CEO), Fred. Olsen Windcarrier AS (CEO), Fred. Olsen Windcarrier Ltd (MD), Fred. Olsen Windcarrier GmbH (MD), Fred. Olsen Marine Services AS (COB), Global Wind Service A/S (COB), Fred. Olsen Windcarrier A/S (COB), Universal Foundation A/S (COB). Universal ...... Foundation Norway AS (MD), Fred. Olsen Energy ASA (Project Director)
Markus H. Enge
Markus H. Enge holds an MSc in Accounting and Auditing and an MSc in Economics and Business Administration, both from the Norwegian School of Economics (NHH). Markus has worked as a senior associate at KPMG from 2011 to 2013. From the end of 2013 to 2016 he worked in EAM Solar as a project leader and Director of M&A and worked mainly with financial aspects of solar PV projects in Italy. In January 2016, he joined Solex and subsequently Aega from February 2017.
Current directorships and senior management AEGA ASA (CFO) positions ...... Previous directorships and senior management positions last Aega Solar AS (Interim CEO and CFO), EAM Solar Park Management five years (Director M&A)
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10.4 Remuneration and benefits 10.4.1 Remuneration of the Board of Directors The remuneration to be paid to the Board Members for their services for the period from the Annual General Meeting held 18 May 2016 to the Annual General Meeting to be held in 2017 is NOK 250,000 for the Chairman of the Board, and NOK 200,000 to each of the other Board Members.
The table below set out the remuneration to the Board of Directors in 2016.
Salary Other expensed (NOK) benefits and bonus
(NOK) Knut Øversjøen ...... 237,329 385,898 Grete Sønsteby1 ...... 144,110 - Göran Mikael Schoultz2 ...... 189,863 399,618 Ketil Reed Aasgaard3 ...... 8,494 - Geir Upsaker4 ...... 4,247 - Solveig Fagerheim Bugge5 ...... 170,685 - 1. Served until 29 November 2016 2. Served from 18 January 2016 until 29 November 2016 3. Served until 18 January 2016 4. Served until 18 January 2016 and again from 29 November 2016 5. Served from 22 February 2016. Remuneration does not include fee invoiced by Advokatfirmaet Thommessen AS for legal services
Remuneration of strategic advisors to the Board of Directors
Lars-Gøran Dysterud Hansen is engaged as a full-time consultant through his company Soleternus AS. His fixed yearly remuneration is NOK 900,000 and there are no bonus schemes applicable.
10.4.2 Remuneration of the management The CEO, Mr. Normann has a fixed yearly income of NOK 1,500,000. In addition, he has a bonus scheme adding up to a value of twelve months’ salary in case certain defined targets are met. This bonus may be paid partly in Company shares at the Company’s discretion.
The CFO, Mr. Enge has a similar arrangement. His fixed yearly salary is NOK 770,000 and he has a bonus scheme capped at two months’ salary. This bonus may be paid partly in Company shares at the Company’s discretion.
Except from the bonus that may be paid partly with shares in the Company, the Company has no arrangements for the management and board of directors to acquire shares in the Company.
In 2016, the management of the company was outsourced to Vaagen Corporate Finance AS, a company that has management for hire assignments as its main activity. The assignment was governed by an engagement letter and the remuneration was based on an agreed hourly fee. Vegard Knut Farstein Torsøn Finstad is an employee of Vaagen
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Corporate Finance AS and acted as the Company’s CEO in 2016. The amount paid to Vaagen Corporate Finance AS in 2016 for Mr. Finstad’s services was NOK 846,000.
Plusser AS was appointed as provider of accounting services in 2016. In 2016, the Company paid an amount of NOK 45,240 to Plusser AS and NOK 63,825 to Axera Business Management AS in relation to accounting services. In 2015, the Company paid an amount of NOK 251,899 to Axera Business Management AS in relation to the accounting services purchased from said company during 2015.
10.4.3 Shareholdings and stock options among members of the administrative, management or supervisory bodies Soleternus AS, a company controlled by Lars-Gøran Dysterud Hansen, owns 20.99% (1,000,447 shares) of the outstanding shares in Solex.
Geir Upsaker, Board member in Aega ASA owns 7.94%,(378,750 shares) of the outstanding shares in Solex AS.
Solex AS owns 7,582,534 shares (17.28%) and 2,000,000 Warrants in Aega. 60% of the Consideration Shares grated to Solex in connection with the Solex Transaction (3,000,000 shares) are subject to a lock-up period of 24 months.
Both Lars-Gøran Dysterud Hansen and Geir Upsaker are indirect owners of the Company through their ownership in Solex AS. The following table shows the number of shares and Warrants they indirectly own in the Company:
Name: Number of shares owned Number of warrants owned indirectly in Aega: indirectly in Aega: Lars-Gøran Dysterud Hansen (Soleternus AS) 1,591,286 41,972
Geir Upsaker 602,430 15,890
Except from the persons mentioned above, no members of the management or board of directors own shares in the Company.
10.5 Pensions and retirement benefits The Company has in place a pension scheme whereby all employees are benefitting from 6% p.a. contribution of the gross salary up to 12G. There are no other retirement benefits in the company. Before 2016, the Company had no pension or retirement benefit schemes. Thus, no amount is set aside or accrued by the issuer or its subsidiaries to provide pension, retirement or similar benefits.
10.6 Employees At the end of 2014, 2015, and 2016 the Company had no employees. The management of the Company was outsourced to a third party with management for hire services (see section 10.4.2). The Company currently has two fixed employees and six engaged consultants.
Nomination committee The Company’s Articles of Association provide for a nomination committee composed of three members who are shareholders or representatives of shareholders. The current members of the nomination committee are Ketil Reed Aasgaard (Chairman), Steinar Fretheim and Lars-Gøran Dysterud Hansen. The nomination committee will be responsible for nominating the members of the nomination committee and make recommendations for remuneration to the members of the Boards of Directors and members of the nomination committee. The members of the nomination committee are elected by the General Meeting every two years.
10.7 Corporate governance The Company has adopted and implemented a corporate governance regime which complies with the Norwegian Code of Practice for Corporate Governance dated 30 October 2014 (the "Corporate Governance Code").
The Group has, and will continue to, on an annual basis provide statements on its compliance with the Corporate Governance Code.
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10.8 Conflicts of interests etc. Lars-Gøran Dysterud Hansen and Geir Upsaker are shareholders in Solex ASA (see Section 10.4.3). Other than that, there are currently no actual or potential conflicts of interest between the Company and the private interests or other duties of any of the Board Members and the members of the management, including any family relationships between such persons.
10.9 Fraudulent offence, bankruptcy, incrimination and disqualification None of the members of the Board of Directors or the management has during the last five years preceding the date of this Prospectus:
1) had any convictions in relation to fraudulent offences;
2) been involved in any bankruptcies, receiverships or liquidations in his or her capacity as a founder, member of the administrative body or supervisory body, director or senior manager of a company; or
3) been subject to any official public incrimination and/or sanctions by statutory or regulatory authorities (including designated professional bodies) or been disqualified by a court from acting as a member of the administrative, management or supervisory bodies of an issuer or from acting in the management or conduct of the affairs of any issuer.
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11 RELATED PARTY TRANSACTIONS The Company has in 2016 received management services from its largest shareholder, Solex, under the management agreement between the Company and Solex which was terminated with effect from the completion of the Solex Transaction. For the services received between 1 January 2016 and the date of this Prospectus, the fees paid in the period amounted to EUR 466,463, which represents approximately 19.39% of the Company's revenues in 2016 (ref. Section 9). No services were received from Solex prior to 2016.
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12 CORPORATE INFORMATION AND DESCRIPTION OF SHARE CAPITAL The following is a summary of certain corporate information and material information relating to the Shares and share capital of the Company and certain other shareholder matters, including summaries of certain provisions of the Company’s Articles of Association and applicable Norwegian law in effect as of the date of this Prospectus. The summary does not purport to be complete and is qualified in its entirety by the Company’s Articles of Association and applicable law.
12.1 Company corporate information The Company’s registered and commercial name is Aega ASA. The Company is a public limited liability company organised and existing under the laws of Norway pursuant to the Norwegian Public Limited Liability Companies Act. Aega ASA’s registered office is in the municipality of Oslo, Norway. The Company was incorporated in Norway on 1 July 2011. The Company’s organisation number in the Norwegian Register of Business Enterprises is 997 410 440, and the Shares are registered in book-entry form with the VPS under ISIN NO 001 0626559 (other than the Private Placement Shares which were issued under a separate ISIN number, being ISIN NO 001 0781529, and the Consideration Shares which were issued under a separate ISIN number, being ISIN NO 001 0781529, until the publication of this Prospectus following which they will have the same ISIN number as the Company’s other Shares). The Company’s register of shareholders in VPS is administrated by DNB Bank ASA, Registrars Department, 0021 Oslo, Norway. The Company’s registered office is located at Oscars gate 52, 0258, Oslo, Norway and the Company's main telephone number at that address is +47 91344134. The Company’s website can be found at www.aega.no. Neither the content of www.aega.no, nor of the Group’s other websites, is incorporated by reference into or otherwise forms part of this Prospectus.
12.2 Legal structure The Company is the ultimate parent company of the Group and is a holding company of multiple special purpose vehicles (SPVs) being the beneficial owners of the solar parks. The Company owns directly and indirectly 100% of the shares in Yieldco (Norway) and Piano Molino S.r.l. (Italy). Yieldco holds 100% of the shares in Aega Energy Prima AS (Norway), Aega Energy Seconda AS (Norway) and Aega Energy Terza AS (Norway). Aega Energy AS holds 100% of the shares in Photo-Volt One S.r.l. (Italy) and DT S.r.l. (Italy). Aega Energy Seconda AS holds 100% of the shares in Collesanto S.r.l. (Italy), while AEGA Energy Terza AS holds 100% of the shares in JER-12 S.r.l. (Italy). The six Italian companies are special purpose vehicles owning the solar plant assets.
The following chart sets out the Group’s legal group structure as of the date of the Prospectus:
All subsidiaries are owned 100%.
12.3 Trading on stock exchange The Company has been listed on Oslo Axess in Norway since 7 November 2011.
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12.4 Share capital and share capital history As of the date of this Prospectus, the Company’s share capital is NOK 43,882,141 divided into 43,882,141 Shares, each with a nominal value of NOK 1.0. All the Shares have been created under the Norwegian Public Limited Liability Companies Act, and are validly issued and fully paid. The Shares are issued in NOK.
As a consequence of the Acquisition and the Solex Transaction (ref. Sections 7.2 and 16), more than 10% of the capital has been paid for with assets other than cash within the period covered by the Financial Information.
The Company has one class of shares. Neither the Company nor any of its subsidiaries directly or indirectly owns shares in the Company.
The table below shows the development in the Company’s share capital since the Company's incorporation to the date hereof:
Change in share capital Nominal value New number New share Date of resolution Type of change (NOK) (NOK) of shares capital (NOK)
1 July 2011 Incorporation 1,580,724 1 - 1,580,724 10 October 2011 Capital increase 628,296 1 2,209,020 2,209,020 18 January 2016 Capital increase 25,151,275 1 27,360,295 27,360,295 30 May 2016 Capital increase 8,530,662 1 35,890,957 35,890,957 19 December 2016 Capital increase 4,991,184 1 40,882,141 40,882,141 27 January 2017 Capital increase 3,000,000 1 43,882,141 43,882,141
The number of shares in the Company was 2,209,020 shares both per 1 January 2015 and per 31 December 2015.
12.5 Ownership structure As of 24 March 2017, the Company had 324 shareholders. Approximately 99.8% of the Shares were held by Norwegian citizens and approximately 0.2% were held by foreign citizens. The Company’s 20 largest shareholders as registered in the VPS as of 20 March 2017 are shown in the table below:
# Shareholders Number of Shares Pericent
1 SOLEX AS ...... 7,582,534 17.28 % 2 BEARHILL INC AS ...... 3,282,034 7,48% 3 THORVALD MORRIS HARALDSEN ...... 1,605,333 3.66 % 4 TORE SÆTREMYR ...... 1,277,694 2.91 % 5 LJM AS ...... 1,134,890 2.59 % 6 MOGER INVEST AS ...... 1,134,890 2.59 % 7 MORO AS ...... 933,667 2.13 % 8 JAN STEINAR NEREM ...... 919,724 2.10 % 9 OLAV VESAAS ...... 877,141 2.00 % 10 PENTHOUSE MIRADORES AS ...... 716,667 1.63 % 11 TORSTEIN SØLAND ...... 668,890 1.52 %
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# Shareholders Number of Shares Pericent
12 FINN STRØM- RASMUSSEN ...... 666,667 1.52 % 13 RACCOLTA AS ...... 595,840 1.36 % 14 CLEAR THOUGHT AS ...... 551,833 1.26 % 15 BETONGCONSULT EIENDOM AS ...... 551,277 1.26 % 16 JAN P HARTO AS ...... 507,841 1.16 % 17 ROALD ARNOLD NYGÅRD ...... 500,000 1.14 % 18 VIA GLORIA AS ...... 500,000 1.14 % 19 FIN SERCK- HANSSEN ...... 462,657 1.05 % 20 MAGNOLIA SYSTEM AS ...... 450,667 1.03 %
Top 20 shareholders ...... 24,920,246 56.79 %
Others ...... 18,961,895 43.21 %
Total ...... 43,882,141 100.0%
There are no differences in voting rights between the shareholders.
Shareholders owning 5% or more of the Shares have an interest in the Company’s share capital which is notifiable pursuant to the Norwegian Securities Trading Act. See Section 13.7 “Disclosure obligations” for a description of the disclosure obligations under the Norwegian Securities Trading Act. As of 20 March 2017, Solex owned 17.28% and Bearhill Inc AS owned 7.48% of the Shares. The Company is not aware of any other persons or entities who, directly or indirectly, have an interest in 5% or more of the Shares.
12.6 Authorisation to increase the share capital and to issue Shares On 29 November 2016, the Company’s General Meeting passed a resolution to grant the Board of Directors an authorisation to increase the share capital of the Company by up to NOK 17,945,478, equal to approximately 50% of the Company’s share capital. The Board of Directors used the authorization to increase the Company's share capital by NOK 4,991,184 in connection with the Private Placement. As of the date of this Prospectus, the Board of Directors has an outstanding authorisation to increase the share capital with up to NOK 12,954,294.
In addition, the extraordinary general meeting held on 27 January 2017 resolved to issue 3,000,000 Consideration Shares and 2,000,000 Warrants related to the Solex Transaction (see sections 16.1 and 16.2)
12.7 Authorisation to acquire treasury shares The Board of Directors has an outstanding authorisation, as resolved in the Company’s extraordinary general meeting on 27 January 2017, to acquire the Company’s own Shares (treasury shares) with an aggregate nominal value of up to NOK 4,088,214. The lowest and the highest price that may be paid per share shall be NOK 1 and NOK 20, respectively. This authorisation is valid until the annual general meeting in 2018, but in no event longer than until 30 June 2018.
12.8 Other financial instruments Other than the 2,000,000 Warrants described in Section 16.1, neither the Company nor any of its subsidiaries has issued any options, warrants, convertible loans or other instruments that would entitle a holder of any such instrument to subscribe for any shares in the Company or its subsidiaries. Furthermore, neither the Company nor any of its subsidiaries
62 has issued subordinated debt or transferable securities other than the Shares and the shares in its subsidiaries, which will be held, directly or indirectly, by the Company.
12.9 Shareholder rights The Company has one class of Shares in issue, and in accordance with the Norwegian Public Limited Liability Companies Act, all Shares in that class provide equal rights in the Company. Each of the Company’s Shares carries one vote. The rights attaching to the Shares are described in Section 12.10 "The Articles of Association and certain aspects of Norwegian law".
12.10 The Articles of Association and certain aspects of Norwegian law 12.10.1 The Articles of Association The Company’s Articles of Association are set out in Appendix A to this Prospectus. Below is a summary of provisions of the Articles of Association.
Objective of the Company
The Company's objective set out in article 3 of the Company's Articles of Association is to invest in and own companies within the solar energy industry and everything related thereto. The Company may also engage in trading with financial securities, mainly shares, equity certificates and derivatives related to these, including business in connection with this.
Registered office
The Company's registered office is in the municipality of Oslo, Norway.
Share capital and shares
The Company’s share capital is NOK 43,882,141 divided into 43,882,141 Shares, each Share with a nominal value of NOK 1. The Shares are registered with the Norwegian Central Securities Depository (VPS).
Board of Directors
The Company’s Board of Directors shall consist of a minimum of three and a maximum of eight members.
Signatory powers
The Company's CEO and the Chairman of the Board of Directors are, separately, authorized signatories of the Company.
Nomination committee
The Company shall have a nomination committee. See Section 0 “Nomination committee".
General meetings
The ordinary General Meeting shall approve the annual financial reports and annual statement, including the distribution of dividends. In addition, the ordinary General Meeting shall review and approve all other matters required by law or the Articles of Association. The Company may communicate by electronical means to give notices, information, documents etc. to the shareholders. Documents relating to matters to be addressed by the General Meeting, which are made available on the Company's internet home page, will not be sent to the shareholders.
Restrictions on transfer of Shares
The Articles of Association do not provide for any restrictions on the transfer of Shares, or a right of first refusal in relation to the Shares. Share transfers are not subject to approval by the Board of Directors.
12.10.2 Certain aspects of Norwegian corporate law General meetings Through the General Meeting, shareholders exercise supreme authority in a Norwegian company. In accordance with Norwegian law, the annual General Meeting of shareholders is required to be held each year on or prior to 30 June. Norwegian law requires that written notice of annual General Meetings setting forth the time of, the venue for and the
63 agenda of the meeting be sent to all shareholders with a known address no later than 21 days before the annual General Meeting of a Norwegian public limited company listed on a stock exchange or a regulated market shall be held, unless the articles of association stipulate a longer deadline, which is not currently the case for the Company.
A shareholder may vote at the General Meeting either in person or by proxy appointed at their own discretion. Although Norwegian law does not require the Company to send proxy forms to its shareholders for General Meetings, the Company plans to include a proxy form with notices of General Meetings. All of the Company’s shareholders who are registered in the register of shareholders maintained with the VPS as of the date of the General Meeting, or who have otherwise reported and documented ownership to Shares, are entitled to participate at General Meetings.
Apart from the annual General Meeting, extraordinary General Meetings of shareholders may be held if the Board of Directors considers it necessary. An extraordinary General Meeting of shareholders must also be convened if, in order to discuss a specified matter, the auditor or shareholders representing at least 5% of the share capital demands this in writing. The requirements for notice and admission to the annual General Meeting also apply to extraordinary General Meetings. However, the annual General Meeting of a Norwegian public limited company may with a majority of at least two-thirds of the aggregate number of votes cast as well as at least two-thirds of the share capital represented at a General Meeting resolve that extraordinary General Meetings may be convened with a 14 day notice period until the next annual General Meeting provided the Company has procedures in place allowing shareholders to vote electronically.
Voting rights – amendments to the Articles of Association Each of the Shares carries one vote. In general, decisions that shareholders are entitled to make under Norwegian law or the Articles of Association may be made by a simple majority of the votes cast. In the case of elections or appointments, the person(s) who receive(s) the greatest number of votes cast are elected. However, as required under Norwegian law, certain decisions, including resolutions to waive preferential rights to subscribe in connection with any share issue in the Company, to approve a merger or demerger of the Company, to amend the Articles of Association, to authorize an increase or reduction in the share capital, to authorize an issuance of convertible loans or warrants by the Company or to authorize the Board of Directors to purchase Shares and hold them as treasury shares or to dissolve the Company, must receive the approval of at least two-thirds of the aggregate number of votes cast as well as at least two-thirds of the share capital represented at a General Meeting. Norwegian law further requires that certain decisions, which have the effect of substantially altering the rights and preferences of any shares or class of shares, receive the approval by the holders of such shares or class of shares as well as the majority required for amending the Articles of Association.
Decisions that (i) would reduce the rights of some or all of the Company’s shareholders in respect of dividend payments or other rights to assets or (ii) restrict the transferability of the Shares, require that at least 90% of the share capital represented at the General Meeting in question vote in favor of the resolution, as well as the majority required for amending the Articles of Association.
In general, only a shareholder registered in the VPS is entitled to vote for such Shares. Beneficial owners of the Shares that are registered in the name of a nominee are generally not entitled to vote under Norwegian law, nor is any person who is designated in the VPS register as the holder of such Shares as nominees. Investors should note that there are varying opinions as to the interpretation of the right to vote on nominee registered shares. In the Company’s view, a nominee may not meet or vote for Shares registered on a NOM-account. A shareholder must, in order to be eligible to register, meet and vote for such Shares at the General Meeting, transfer the Shares from such NOM-account to an account in the shareholder’s name.
There are no quorum requirements that apply to the General Meetings.
Additional issuances and preferential rights If the Company issues any new Shares, including bonus share issues, the Articles of Association must be amended, which requires the same vote as other amendments to the Articles of Association. In addition, under Norwegian law, the Company’s shareholders have a preferential right to subscribe for new Shares issued by the Company. Preferential rights may be derogated from by resolution in a General Meeting passed by the same vote required to amend the Articles of Association. A derogation of the shareholders’ preferential rights in respect of bonus issues requires the approval of all outstanding Shares.
The General Meeting may, by the same vote as is required for amending the Articles of Association, authorize the Board of Directors to issue new Shares, and to derogate from the preferential rights of shareholders in connection with such issuances. Such authorization may be effective for a maximum of two years, and the nominal value of the Shares to be issued may not exceed 50% of the registered par share capital when the authorization is registered with the Norwegian 64
Register of Business Enterprises.
Under Norwegian law, the Company may increase its share capital by a bonus share issue, subject to approval by the Company’s shareholders, by transfer from the Company’s distributable equity or from the Company’s share premium reserve and thus the share capital increase does not require any payment of a subscription price by the shareholders. Any bonus issues may be affected either by issuing new shares to the Company’s existing shareholders or by increasing the nominal value of the Company’s outstanding Shares.
Issuance of new Shares to shareholders who are citizens or residents of the United States upon the exercise of preferential rights may require the Company to file a registration statement in the United States under United States securities laws. Should the Company in such a situation decide not to file a registration statement, the Company’s U.S. shareholders may not be able to exercise their preferential rights. If a U.S. shareholder is ineligible to participate in a rights offering, such shareholder would not receive the rights at all and the rights would be sold on the shareholder’s behalf by the Company.
Minority rights Norwegian law sets forth a number of protections for minority shareholders of the Company, including, but not limited to, those described in this paragraph and the description of General Meetings as set out above. Any of the Company’s shareholders may petition Norwegian courts to have a decision of the Board of Directors or the Company’s shareholders made at the General Meeting declared invalid on the grounds that it unreasonably favors certain shareholders or third parties to the detriment of other shareholders or the Company itself. The Company’s shareholders may also petition the courts to dissolve the Company as a result of such decisions to the extent particularly strong reasons are considered by the court to make necessary dissolution of the Company.
Minority shareholders holding 5% or more of the Company’s share capital have a right to demand in writing that the Company’s Board of Directors convene an extraordinary General Meeting to discuss or resolve specific matters. In addition, any of the Company’s shareholders may in writing demand that the Company place an item on the agenda for any General Meeting as long as the Company is notified in time for such item to be included in the notice of the meeting. If the notice has been issued when such a written demand is presented, a renewed notice must be issued if the deadline for issuing notice of the General Meeting has not expired.
Rights of redemption and repurchase of Shares The share capital of the Company may be reduced by reducing the nominal value of the Shares or by cancelling Shares. Such a decision requires the approval of at least two-thirds of the aggregate number of votes cast and at least two- thirds of the share capital represented at a General Meeting. Redemption of individual Shares requires the consent of the holders of the Shares to be redeemed.
The Company may purchase its own Shares provided that the Board of Directors has been granted an authorization to do so by a General Meeting with the approval of at least two-thirds of the aggregate number of votes cast and at least two-thirds of the share capital represented at the meeting. The aggregate nominal value of treasury shares so acquired, and held by the Company must not exceed 10% of the Company’s share capital, and treasury shares may only be acquired if the Company’s distributable equity, according to the latest adopted balance sheet, exceeds the consideration to be paid for the shares. The authorization by the General Meeting of the Company’s shareholders cannot be granted for a period exceeding 18 months.
Shareholder vote on certain reorganizations A decision of the Company’s shareholders to merge with another company or to demerge requires a resolution by the General Meeting passed by at least two-thirds of the aggregate votes cast and at least two-thirds of the share capital represented at the General Meeting. A merger plan, or demerger plan signed by the Board of Directors along with certain other required documentation, would have to be sent to all the Company’s shareholders, or if the Articles of Association stipulate that, made available to the shareholders on the Company’s website, at least one month prior to the General Meeting to pass upon the matter.
Liability of members of the Board of Directors Board Members owe a fiduciary duty to the Company and its shareholders. Such fiduciary duty requires that the Board Members act in the best interests of the Company when exercising their functions and exercise a general duty of loyalty and care towards the Company. Their principal task is to safeguard the interests of the Company.
Board Members may each be held liable for any damage they negligently or wilfully cause the Company. Norwegian law
65 permits the General Meeting to discharge any such person from liability, but such discharge is not binding on the Company if substantially correct and complete information was not provided at the General Meeting passing upon the matter. If a resolution to discharge the Company’s Board Members from liability or not to pursue claims against such a person has been passed by a General Meeting with a smaller majority than that required to amend the Articles of Association, shareholders representing more than 10% of the share capital or, if there are more than 100 shareholders, more than 10% of the shareholders may pursue the claim on the Company’s behalf and in its name. The cost of any such action is not the Company’s responsibility but can be recovered from any proceeds the Company receives as a result of the action. If the decision to discharge any of the Company’s Board Members from liability or not to pursue claims against the Company’s Board Members is made by such a majority as is necessary to amend the Articles of Association, the minority shareholders of the Company cannot pursue such claim in the Company’s name.
Indemnification of Directors Neither Norwegian law nor the Articles of Association contains any provision concerning indemnification by the Company of the Board of Directors. The Company is permitted to purchase insurance for the Board Members against certain liabilities that they may incur in their capacity as such.
Distribution of assets on liquidation Under Norwegian law, the Company may be wound-up by a resolution of the Company’s shareholders at the General Meeting passed by at least two-thirds of the aggregate votes cast and at least two-thirds of the share capital represented at the meeting. In the event of liquidation, the Shares rank equally in the event of a return on capital.
12.10.3 Shareholders’ agreements To the knowledge of the Company, there are no shareholders’ agreements related to the Shares.
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13 SECURITIES TRADING IN NORWAY Set out below is a summary of certain aspects of securities trading in Norway. The summary is based on the rules and regulations in force in Norway as at the date of this Prospectus, which may be subject to changes occurring after such date. The summary does not purport to be a comprehensive description of securities trading in Norway. Shareholders who wish to clarify the aspects of securities trading in Norway should consult with and rely upon their own advisors.
13.1 Introduction Oslo Axess was established in 2007 and is a Norwegian regulated market, operated by the Oslo Stock Exchange, in which mainly shares are traded.
13.2 Trading and settlement Trading of equities on Oslo Axess is carried out in the electronic trading system Millennium Exchange. This trading system is in use by all markets operated by the London Stock Exchange, including the Borsa Italiana, as well as by the Johannesburg Stock Exchange.
Official trading on Oslo Axess takes place between 09:00 hours (CET) and 16:20 hours (CET) each trading day, with pre-trade period between 08:15 hours (CET) and 09:00 hours (CET), closing auction from 16:20 hours (CET) to 16:25 hours (CET) and a post-trade period from 16:25 hours (CET) to 17:30 hours (CET). Reporting of after exchange trades can be done until 17:30 hours (CET).
The settlement period for trading on Oslo Axess is two trading days (T+2). This means that securities will be settled on the investor’s account in the VPS two days after the transaction, and that the seller will receive payment after two days.
Oslo Clearing ASA, a wholly-owned subsidiary of SIX x-clear AG, a company in the SIX group, has a license from the Norwegian FSA to act as a central clearing service, and has from 18 June 2010 offered clearing and counterparty services for equity trading on Oslo Axess.
Investment services in Norway may only be provided by Norwegian investment firms holding a license under the Norwegian Securities Trading Act, branches of investment firms from an EEA member state or investment firms from outside the EEA that have been licensed to operate in Norway. Investment firms in an EEA member state may also provide cross-border investment services into Norway.
It is possible for investment firms to undertake market-making activities in shares listed in Norway if they have a license to this effect under the Norwegian Securities Trading Act, or in the case of investment firms in an EEA member state, a license to carry out market-making activities in their home jurisdiction. Such market-making activities will be governed by the regulations of the Norwegian Securities Trading Act relating to brokers’ trading for their own account. However, such market-making activities do not as such require notification to the Norwegian FSA or the Oslo Stock Exchange except for the general obligation of investment firms that are members of the Oslo Stock Exchange to report all trades in stock exchange listed securities.
13.3 Information, control and surveillance Under Norwegian law, the Oslo Stock Exchange is required to perform a number of surveillance and control functions regarding Oslo Axess. The Surveillance and Corporate Control unit of the Oslo Stock Exchange monitors all market activity on a continuous basis. Market surveillance systems are largely automated, promptly warning department personnel of abnormal market developments.
The Norwegian FSA controls the issuance of securities in both the equity and bond markets in Norway and evaluates whether the issuance documentation contains the required information and whether it would otherwise be unlawful to carry out the issuance.
Under Norwegian law, a company that is listed on a Norwegian regulated market, or has applied for listing on such market, must promptly release any inside information directly concerning the company. Inside information means precise information about financial instruments, the issuer thereof or other matters which are likely to have a significant effect on the price of the relevant financial instruments or related financial instruments, and which are not publicly available or commonly known in the market. A company may, however, delay the release of such information in order not to prejudice its legitimate interests, provided that it is able to ensure the confidentiality of the information and that the delayed release would not be likely to mislead the public. The Oslo Stock Exchange may levy fines on companies violating these requirements.
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13.4 The VPS and transfer of Shares The Company’s principal share register is operated through the VPS. The VPS is the Norwegian paperless centralized securities register. It is a computerized book-keeping system in which the ownership of, and all transactions relating to, Norwegian listed shares must be recorded. The VPS and the Oslo Stock Exchange are both wholly-owned by Oslo Børs VPS Holding ASA.
All transactions relating to securities registered with the VPS are made through computerized book entries. No physical share certificates are, or may be, issued. The VPS confirms each entry by sending a transcript to the registered shareholder irrespective of any beneficial ownership. To give effect to such entries, the individual shareholder must establish a share account with a Norwegian account agent. Norwegian banks, Norges Bank (being, Norway’s central bank), authorized securities brokers in Norway and Norwegian branches of credit institutions established within the EEA are allowed to act as account agents.
As a matter of Norwegian law, the entry of a transaction in the VPS is prima facie evidence in determining the legal rights of parties as against the issuing company or any third party claiming an interest in the given security. A transferee or assignee of shares may not exercise the rights of a shareholder with respect to such shares unless such transferee or assignee has registered such shareholding or has reported and shown evidence of such share acquisition, and the acquisition is not prevented by law, the relevant company’s articles of association or otherwise.
The VPS is liable for any loss suffered as a result of faulty registration or an amendment to, or deletion of, rights in respect of registered securities unless the error is caused by matters outside the VPS’ control which the VPS could not reasonably be expected to avoid or overcome the consequences of. Damages payable by the VPS may, however, be reduced in the event of contributory negligence by the aggrieved party.
The VPS must provide information to the Norwegian FSA on an ongoing basis, as well as any information that the Norwegian FSA requests. Further, Norwegian tax authorities may require certain information from the VPS regarding any individual’s holdings of securities, including information about dividends and interest payments.
13.5 Shareholder register – Norwegian law Under Norwegian law, shares are registered in the name of the beneficial owner of the shares. As a general rule, there are no arrangements for nominee registration and Norwegian shareholders are not allowed to register their shares in the VPS through a nominee. However, foreign shareholders may register their shares in the VPS in the name of a nominee (bank or other nominee) approved by the Norwegian FSA. An approved and registered nominee has a duty to provide information on demand about beneficial shareholders to the company and to the Norwegian authorities. In case of registration by nominees, the registration in the VPS must show that the registered owner is a nominee. A registered nominee has the right to receive dividends and other distributions, but cannot vote in General Meetings on behalf of the beneficial owners.
13.6 Foreign investment in shares listed in Norway Foreign investors may trade shares listed on Oslo Axess through any broker that is a member of the Oslo Stock Exchange, whether Norwegian or foreign.
13.7 Disclosure obligations If a person’s, entity’s or consolidated group’s proportion of the total issued shares and/or rights to shares in a company listed on a regulated market in Norway (with Norway as its home state, which will be the case for the Company) reaches, exceeds or falls below the respective thresholds of 5%, 10%, 15%, 20%, 25%, 1/3, 50%, 2/3 or 90% of the share capital or the voting rights of that company, the person, entity or group in question has an obligation under the Norwegian Securities Trading Act to notify the Oslo Stock Exchange and the issuer immediately. The same applies if the disclosure thresholds are passed due to other circumstances, such as a change in the company’s share capital.
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13.8 Insider trading According to Norwegian law, subscription for, purchase, sale or exchange of financial instruments that are listed, or subject to the application for listing, on a Norwegian regulated market, or incitement to such dispositions, must not be undertaken by anyone who has inside information, as defined in Section 3-2 of the Norwegian Securities Trading Act. The same applies to the entry into, purchase, sale or exchange of options or futures/forward contracts or equivalent rights whose value is connected to such financial instruments or incitement to such dispositions.
13.9 Mandatory offer requirement The Norwegian Securities Trading Act requires any person, entity or consolidated group that becomes the owner of shares representing more than one-third of the voting rights of a company listed on a Norwegian regulated market (with the exception of certain foreign companies not including the Company) to, within four weeks, make an unconditional general offer for the purchase of the remaining shares in that company. A mandatory offer obligation may also be triggered where a party acquires the right to become the owner of shares that, together with the party’s own shareholding, represent more than one-third of the voting rights in the company and the Oslo Stock Exchange decides that this is regarded as an effective acquisition of the shares in question.
The mandatory offer obligation ceases to apply if the person, entity or consolidated group sells the portion of the shares that exceeds the relevant threshold within four weeks of the date on which the mandatory offer obligation was triggered.
When a mandatory offer obligation is triggered, the person subject to the obligation is required to immediately notify the Oslo Stock Exchange and the company in question accordingly. The notification is required to state whether an offer will be made to acquire the remaining shares in the company or whether a sale will take place. As a rule, a notification to the effect that an offer will be made cannot be retracted. The offer and the offer document required are subject to approval by the Oslo Stock Exchange before the offer is submitted to the shareholders or made public.
The offer price per share must be at least as high as the highest price paid or agreed by the offeror for the shares in the six-month period prior to the date the threshold was exceeded. If the acquirer acquires or agrees to acquire additional shares at a higher price prior to the expiration of the mandatory offer period, the acquirer is obliged to restate its offer at such higher price. A mandatory offer must be in cash or contain a cash alternative at least equivalent to any other consideration offered.
In case of failure to make a mandatory offer or to sell the portion of the shares that exceeds the relevant threshold within four weeks, the Oslo Stock Exchange may force the acquirer to sell the shares exceeding the threshold by public auction. Moreover, a shareholder who fails to make an offer may not, as long as the mandatory offer obligation remains in force, exercise rights in the company, such as voting in a General Meeting, without the consent of a majority of the remaining shareholders. The shareholder may, however, exercise his/her/its rights to dividends and pre-emption rights in the event of a share capital increase. If the shareholder neglects his/her/its duty to make a mandatory offer, the Oslo Stock Exchange may impose a cumulative daily fine that runs until the circumstance has been rectified.
Any person, entity or consolidated group that owns shares representing more than one-third of the votes in a company listed on a Norwegian regulated market (with the exception of certain foreign companies not including the Company) is obliged to make an offer to purchase the remaining shares of the company (repeated offer obligation) if the person, entity or consolidated group through acquisition becomes the owner of shares representing 40%, or more of the votes in the company. The same applies correspondingly if the person, entity or consolidated group through acquisition becomes the owner of shares representing 50% or more of the votes in the company. The mandatory offer obligation ceases to apply if the person, entity or consolidated group sells the portion of the shares which exceeds the relevant threshold within four weeks of the date on which the mandatory offer obligation was triggered.
Any person, entity or consolidated group that has passed any of the above mentioned thresholds in such a way as not to trigger the mandatory bid obligation, and has therefore not previously made an offer for the remaining shares in the company in accordance with the mandatory offer rules is, as a main rule, obliged to make a mandatory offer in the event of a subsequent acquisition of shares in the company.
13.10 Compulsory acquisition Pursuant to the Norwegian Public Limited Liability Companies Act and the Norwegian Securities Trading Act, a shareholder who, directly or through subsidiaries, acquires shares representing 90% or more of the total number of issued shares in a Norwegian public limited liability company, as well as 90% or more of the total voting rights, has a right, and each remaining minority shareholder of the company has a right to require such majority shareholder, to effect a compulsory acquisition for cash of the shares not already owned by such majority shareholder. Through such compulsory acquisition the majority shareholder becomes the owner of the remaining shares with immediate effect. 69
If a shareholder acquires shares representing more than 90% of the total number of issued shares, as well as more than 90% of the total voting rights, through a voluntary offer in accordance with the Securities Trading Act, a compulsory acquisition can, subject to the following conditions, be carried out without such shareholder being obliged to make a mandatory offer: (i) the compulsory acquisition is commenced no later than four weeks after the acquisition of shares through the voluntary offer, (ii) the price offered per share is equal to or higher than what the offer price would have been in a mandatory offer, and (iii) the settlement is guaranteed by a financial institution authorized to provide such guarantees in Norway.
A majority shareholder who effects a compulsory acquisition is required to offer the minority shareholders a specific price per share, the determination of which is at the discretion of the majority shareholder. However, where the offeror, after making a mandatory or voluntary offer, has acquired more than 90% of the voting shares of a company and a corresponding proportion of the votes that can be cast at the General Meeting, and the offeror pursuant to Section 4-25 of the Norwegian Public Liability Limited Companies Act completes a compulsory acquisition of the remaining shares within three months after the expiry of the offer period, it follows from the Norwegian Securities Trading Act that the redemption price shall be determined on the basis of the offer price for the mandatory/voluntary offer unless specific reasons indicate another price.
Should any minority shareholder not accept the offered price, such minority shareholder may, within a specified deadline of not less than two months, request that the price be set by a Norwegian court. The cost of such court procedure will, as a general rule, be the responsibility of the majority shareholder, and the relevant court will have full discretion in determining the consideration to be paid to the minority shareholder as a result of the compulsory acquisition.
Absent a request for a Norwegian court to set the price or any other objection to the price being offered, the minority shareholders would be deemed to have accepted the offered price after the expiry of the specified deadline.
13.11 Foreign exchange controls There are currently no foreign exchange control restrictions in Norway that would potentially restrict the payment of dividends to a shareholder outside Norway, and there are currently no restrictions that would affect the right of shareholders of a company that has its shares registered with the VPS who are not residents in Norway to dispose of their shares and receive the proceeds from a disposal outside Norway. There is no maximum transferable amount either to or from Norway, although transferring banks are required to submit reports on foreign currency exchange transactions into and out of Norway into a central data register maintained by the Norwegian customs and excise authorities. The Norwegian police, tax authorities, customs and excise authorities, the National Insurance Administration and the Norwegian FSA have electronic access to the data in this register.
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14 TAXATION Set out below is a summary of certain Norwegian tax matters related to an investment in the Company. The summary regarding Norwegian taxation is based on the laws in force in Norway as at the date of this Prospectus, which may be subject to any changes in law occurring after such date. Such changes could possibly be made on a retrospective basis. The following summary does not purport to be a comprehensive description of all the tax considerations that may be relevant to a decision to purchase, own or dispose of the shares in the Company. Shareholders who wish to clarify their own tax situation should consult with and rely upon their own tax advisers. Shareholders resident in jurisdictions other than Norway and shareholders who cease to be resident in Norway for tax purposes (due to domestic tax law or tax treaty) should specifically consult with and rely upon their own tax advisers with respect to the tax position in their country of residence and the tax consequences related to ceasing to be resident in Norway for tax purposes. Please note that for the purpose of the summary below, a reference to a Norwegian or non-Norwegian shareholder refers to the tax residency rather than the nationality of the shareholder.
14.1 Norwegian taxation 14.1.1 Norwegian Shareholders Taxation of Dividends Dividends received by shareholders that are limited liability companies (and certain similar entities) resident in Norway for tax purposes ("Norwegian Corporate Shareholders") are effectively taxed at a rate of 0.72% (i.e. 3% of dividend income from such shares is included in the calculation of ordinary income for Norwegian Corporate Shareholders and ordinary income is subject to tax at a flat rate of currently 24%).
Dividends received by shareholders who are individuals resident in Norway for tax purposes ("Norwegian Individual Shareholders") are taxable at a flat rate of currently 29.76% to the extent the dividend exceeds a tax-free allowance; i.e. dividends received, less the tax free allowance, shall be multiplied by 1.24 which are then included as ordinary income taxable at a flat rate of 24%, increasing the effective tax rate on dividends received by Norwegian Individual Shareholders to 29.76%. The allowance is calculated on a share-by-share basis. The allowance for each share is equal to the cost price of the share (plus any excess allowance from previous years) multiplied by a determined risk-free interest rate based on the effective rate after tax of interest on treasury bills (Norwegian: "statskasseveksler") with three months’ maturity. The allowance is calculated for each calendar year, and is allocated solely to Norwegian Individual Shareholders holding shares at the expiration of the relevant income year.
Norwegian Individual Shareholders who transfer shares will thus not be entitled to deduct any calculated allowance related to the year of transfer. Any part of the calculated allowance one year exceeding the dividend distributed on the share (“excess allowance”) may be carried forward and set off against future dividends received on (or gains upon realisation of, see below) the same share. Any excess allowance will also be included in the basis for calculating the allowance on the same share in the following years.
Taxation of Capital Gains Sale, redemption or other disposal of shares is considered a realisation for Norwegian tax purposes. Capital gains generated by Norwegian Corporate Shareholders through a realisation of shares qualifying for Norwegian participation exemption, including the shares in the Company, are exempt from tax. Losses upon the realisation of shares and costs incurred in connection with the purchase and realisation of such shares are not tax deductible for Norwegian Corporate Shareholders.
A capital gain or loss generated by a Norwegian Individual Shareholder through realisation of shares is taxable or tax deductible in Norway. The effective tax rate on gain or loss related to shares realised by Norwegian Individual Shareholders is currently 29.76%; i.e. capital gains (less the tax free allowance) and losses shall be multiplied by 1.24 which are then included in or deducted from the Norwegian Individual Shareholder's ordinary income in the year of disposal. Ordinary income is taxable at a flat rate of 24%, increasing the effective tax rate on gains/losses realised by Norwegian Individual Shareholders to 29.76%. The gain is subject to tax and the loss is tax deductible irrespective of the duration of the ownership and the number of shares disposed of.
The taxable gain/deductible loss is calculated per share, as the difference between the consideration for the share and the Norwegian Individual Shareholder’s cost price of the share, including any costs incurred in relation to the acquisition or realisation of the share. From this capital gain, Norwegian Individual Shareholders are entitled to deduct a calculated allowance, provided that such allowance has not already been used to reduce taxable dividend income. Please refer to Section 14.1.1 "Norwegian Shareholders - Taxation of dividends" above for a description of the calculation of the allowance. The allowance may only be deducted in order to reduce a taxable gain, and cannot increase or produce a deductible loss, i.e., any unused allowance exceeding the capital gain upon the realisation of a share will be annulled. 71
If the Norwegian Individual Shareholder owns shares acquired at different points in time, the shares that were first acquired will be regarded as the first to be disposed of (the "first in first out"-principle).
Net Wealth Tax The value of shares is included in the basis for computation of net wealth tax imposed on Norwegian Individual Shareholders. The marginal tax rate is currently 0.85% of the value assessed.
The value for assessment purposes for listed shares is currently equal to ninety percent of the listed value as of 1 January in the year of assessment (i.e. the year following the relevant fiscal year). The value of debt allocated to the listed shares is reduced correspondingly (i.e. to ninety percent) for assessment purposes.
Norwegian Corporate Shareholders are not subject to net wealth tax.
14.1.2 Non-Norwegian Shareholders Taxation of Dividends Dividends distributed to shareholders that are not resident in Norway for tax purposes ("Non-Norwegian Shareholders") from a Norwegian limited liability company are as a general rule subject to Norwegian withholding tax at a rate of 25%. The withholding tax rate of 25% is normally reduced through tax treaties between Norway and the country in which the shareholder is resident.
Dividends distributed to Non-Norwegian Shareholders that are limited liability companies ("Non-Norwegian Corporate Shareholders") resident within the EEA for tax purposes are exempt from Norwegian withholding tax provided that the shareholder is the beneficial owner of the shares and that the shareholder is genuinely established and performs genuine economic business activities within the relevant EEA jurisdiction. If the Non-Norwegian Corporate Shareholder holds the shares in connection with business activities in Norway, the shareholder will be subject to the same taxation as a Norwegian Corporate Shareholder, as described above.
Non-Norwegian Shareholders who are individuals ("Non-Norwegian Individual Shareholders") resident within the EEA for tax purposes may apply individually to Norwegian tax authorities for a refund for an amount corresponding to the calculated tax-free allowance in respect of each individual share, please see "Norwegian Shareholders" above.
If a Non-Norwegian Shareholder is carrying on business activities in Norway and the shares are effectively connected with such activities, the shareholder will be subject to the same taxation of dividends as a Norwegian Shareholder, as described above. Non-Norwegian Shareholders who have suffered a higher withholding tax than set out in an applicable tax treaty may apply individually to the Norwegian tax authorities for a refund of the excess withholding tax deducted.
Nominee registered shares will be subject to withholding tax at a rate of 25% unless the nominee has obtained approval from the Norwegian Tax Directorate for the dividend to be subject to a lower withholding tax rate. To obtain such approval the nominee is required to file a summary to the tax authorities including all beneficial owners that are subject to withholding tax at a reduced rate.
The withholding obligation in respect of dividends distributed to Non-Norwegian Shareholders lies with the company distributing the dividends and the Company assumes this obligation.
Foreign Shareholders should consult their own advisers regarding the availability of treaty benefits in respect of dividend payments.
Taxation of Capital Gains Capital gains derived from the sale or other disposal of shares in the Company by Non-Norwegian Corporate Shareholders are not subject to taxation in Norway.
Gains from the sale or other disposal of shares in the Company by a Non-Norwegian Individual Shareholder will not be subject to tax in Norway unless the Non-Norwegian Individual Shareholder holds the shares in connection with business activities carried out or managed from Norway. Such taxation may be limited according to an applicable tax treaty or other specific regulations.
Net Wealth Tax
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Shareholders not resident in Norway for tax purposes are not subject to Norwegian net wealth tax with respect to the Shares, unless the shareholder is an individual and the shareholding is effectively connected to the conduct of trade or business in Norway.
14.1.3 VAT and transfer taxes etc. No VAT, transfer taxes, stamp or similar duties are currently imposed in Norway on the purchase, issuance, disposal or redemption of shares.
14.1.4 Inheritance Tax A transfer of shares through inheritance or as a gift does not give rise to inheritance or gift tax in Norway.
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15 THE PRIVATE PLACEMENT This Section provides information on the completed Private Placement. Please note that the Private Placement Shares issued in the Private Placement have already been subscribed for, paid and issued.
15.1 Background for and terms of the Private Placement In December 2016, the Company carried out the Private Placement with gross proceeds approximately NOK 15 million. The proceeds from the Private Placement will be used to finance further growth through acquisitions of new solar parks, to cover the Assumed Liabilities assumed through the Solex Transaction and for general corporate purposes.
The Private Placement was directed towards existing shareholders, Norwegian investors and international institutional investors, pursuant to and in compliance with applicable exemptions from the obligation to publish an offering prospectus pursuant to the Norwegian Securities Trading Act. The existing shareholders’ pre-emptive purchase rights was withdrawn in connection with the Private Placement. The reason for the withdrawal was to increase the probability of a successful transaction. Investors subscribing in the Private Placement was the beneficiaries of this withdrawal
The minimum subscription and allocation amount in the Private Placement was the NOK or share equivalent of EUR 100,000, provided however, that the Company reserved the right to offer up to 149 investors to subscribe for and be allocated a lower amount. The Private Placement Shares were offered at a subscription price of NOK 3.00 per Share. The subscription period in the Private Placement lasted from 7 December 2016 until 19 December 2016. The allocation of the Private Placement Shares was at the discretion of the Board of Directors.
Obtaining capital in order to finance the Company's acquisitions of new solar power plants is an important part of the Company's growth strategy. To achieve the Company's growth targets, it was deemed necessary to obtain capital from external investors. The Board of Directors therefore decided to waive the shareholders' preferential right to subscribe for the Private Placement Shares and such waiver was considered objectively justified by the Company's and the shareholders' common interest. Further, the subscription price in the Private Placement was very close to the trading price for the Shares on Oslo Axess in the relevant period. Based on an overall assessment, the Board of Directors after careful consideration concluded that the degree of differential treatment of shareholders in the Private Placement was factually justifiable in the common interest of the Company and its shareholders and that no repair offering would be conducted.
The results of the Private Placement were announced through Oslo Børs' announcement system on 20 December 2016.
The payment date in the Private Placement was 22 December 2016.
The issue of the Private Placement Shares in the Private Placement was made pursuant to an authorisation held by the Board of Directors to increase the Company’s share capital granted by the extraordinary General Meeting on 29 November 2016. The Board of Directors resolved on 19 December 2016 to issue and allocate the 4,991,184 Private Placement Shares. The Private Placement Shares were registered with the Norwegian Register of Business Enterprises on 3 January 2017.
The Private Placement Shares issued in the Private Placement were, when issued, not listed on Oslo Axess and have remained unlisted until the date of the publication of this Prospectus.
15.2 Resolutions regarding the Private Placement On 29 November 2016, the Company’s General Meeting passed the following resolution to grant the Board of Directors an authorisation to increase the share capital of the Company by up to NOK 17,945,478, equal to approximately 50% of the Company’s share capital:
(i) The share capital may in total be increased by up to NOK 17,945,478, which equals 50% of the company’s share capital per date.
(ii) The power of attorney shall also comprise capital increase by non-cash payment or a right to charge the company with special obligations, and merger, cf. the Norwegian Public Limited Companies Act section 10-2 and 13-5.
(iii) The shareholders’ preferential right to subscribe for the new shares may be waived in accordance with the Norwegian Public Limited Liability Companies Act sections 10-4 and 10-5.
(iv) The power of attorney shall be valid for two years from 29 November 2016. 74
(v) The power of attorney replaces all previous power of attorneys to issue new shares.
On 19 December 2016, the Board of Directors passed the following resolution to increase the share capital of the Company through the issue of Private Placement Shares in the Private Placement (translated from Norwegian):
(vi) The share capital is increased with NOK 4,991,184 from NOK 35,890,957 to NOK 40,882,141 by issuing 4,991,184 new shares, each with a par value of NOK 1.
(ii) The subscription price per share is NOK 3.
(iii) The shareholders' pre-emptive right pursuant to Section 10-4 of the Norwegian Public Limited Liability Companies Act shall be set aside.
(iv) The shares shall be subscribed by the Chairman of the Board Knut Øversjøen based on powers of attorney from the subscribers listed in Appendix 1. The shares shall be subscribed for in the minutes from the board meeting.
(v) The share deposits shall be paid in cash to account number 1503.24.46644 no later than 13 January 2016.
(vi) The new shares shall have full shareholder rights, including the right to dividends, from the date of registration of the share capital increase in the Norwegian Register of Business Enterprises.
(vii) Article 4 of the Company’s articles of association is amended to reflect the new number of shares and the new share capital:
“The company’s share capital is NOK40,882,141, divided into 40,882,141 shares, each having a nominal value of NOK 1. The shares shall be registered in the VPS.”
(viii) The expenses in connection with the share capital increase is estimated to NOK 950,000.
15.3 The Private Placement Shares The share capital increase pertaining to the Private Placement was registered with the Norwegian Register of Business Enterprises on 3 January 2017. The Private Placement Shares were upon issue registered in the VPS under a separate ISIN number, being ISIN NO 001 0781529, pending the publication of this Prospectus and the listing of the Private Placement Shares on Oslo Axess.
With effect from the publication of this Prospectus, the Private Placement Shares will be registered under the same ISIN as the Company’s other existing Shares, being ISIN NO 001 0626559, and the Private Placement Shares will be listed and admitted to trading on the Oslo Axess from the same date (being the date hereof).
The Private Placement Shares issued in the Private Placement are ordinary Shares in the Company each having a nominal value of NOK 1 and were delivered electronically in registered book-entry form in the VPS. The Company’s VPS account operator is DNB Bank ASA, Registrar Department, P.O. Box 1600 Sentrum, 0021 Oslo, Norway.
The Private Placement Shares carry full shareholder rights, in all respects equal to the existing Shares of the Company, from the time of registration of the share capital increase pertaining to the Private Placement with the Norwegian Register of Business Enterprises on 3 January 2017.
All Shares, including the Private Placement Shares, will have voting rights and other rights and obligations which are standard under the Norwegian Public Limited Liability Act, and are governed by Norwegian law. See Section 12 "Corporate information and description of share capital" for further information relating to the Shares, including the Private Placement Shares.
15.4 Share capital following the Private Placement Following the registration of the share capital increase pertaining to the Private Placement with the Norwegian Register of Business Enterprises (and prior to the registration of the share capital increase pertaining to the Consideration Shares), the number of issued and outstanding Shares in the Company was increased by 4,991,184 Shares from 35,890,957 Shares to 40,882,141 Shares, each with a nominal value of NOK 1 and the Company’s share capital was increased by NOK 4,991,184 from NOK 35,890,957 to NOK 40,882,141. 75
The Company has only one class of shares outstanding and all Shares are freely transferable.
15.5 Dilution The dilutive effect of the Private Placement is approximately 12.2% (prior to the issue of the Consideration Shares).
15.6 Use of proceeds The net proceeds from the Private Placement (estimated to approximately NOK 14.0 million after payment of expenses (see Section 15.8 "Net proceeds and expenses" below)), will be used to finance further growth through acquisitions of new solar parks, to cover the Assumed Liabilities assumed through the Solex Transaction (see Section 16.1 for further information regarding the Assumed Liabilities) and for general corporate purposes. Interests of natural and legal persons involved in the Private Placement
The Company is not aware of any interests, including conflicting ones, that is material to the Private Placement.
15.7 Advisors Advokatfirmaet Thommessen AS (Norwegian law) is acting as legal adviser to the Company.
SpareBank 1 Markets AS and Pioner Kapital AS are acting as managers and financial advisors to the Company in connection with the Private Placement.
Aabø-Evensen & Co Advokatfirma AS is acting as legal advisor to the Managers in connection with the Private Placement.
15.8 Net proceeds and expenses The Company will bear the fees and expenses related to the Private Placement. The total expenses are estimated to NOK 950,000, relating to fees to the Managers and legal advisors and the publication of this Prospectus. The gross proceeds of the Private Placement amount to NOK 14,973,552. No expenses or taxes will be charged by the Company to the subscribers in the Private Placement.
Total net proceeds from the Private Placement are estimated to approximately NOK 14.0 million.
15.9 Jurisdiction and choice of law This Prospectus, the Private Placement and the Listing shall be governed by, and construed in accordance with, and the New Shares have been issued pursuant to, Norwegian law. Any dispute arising out of, or in connection with, this Prospectus, the Private Placement and the Listing shall be subject to the exclusive jurisdiction of the courts of Norway, with Oslo district court as legal venue.
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16 THE SOLEX TRANSACTION 16.1 Background for and terms of the Solex Transaction On 9 December 2016, Aega and Solex entered into an agreement (the "Solex Agreement") for Aega's acquisition of certain assets and assumption of certain liabilities from Solex. The Solex Transaction was completed on 31 January 2017.
Solex is a management company which has provided management services to Aega pursuant to a management agreement between Aega and Solex, as well as through management agreements between Solex and certain of Aega's subsidiaries (collectively the "Management Agreements"). The Management Agreements, which covered management and operation of Aega’s solar park portfolio, sourcing of new investments, due diligence and other services related to Aega's solar plant business, were terminated with effect from the completion of the Solex Transaction.
The underlying objective of the Solex Transaction was to insource the management services provided by Solex to the Company and thereby create a simpler and more sustainable management structure.
The assets that was acquired included six running consultancy agreements and two employee agreements, personal IT equipment and miscellaneous office furniture.
As consideration for the acquired assets and the termination of the Management Agreements, Aega paid a purchase price of NOK 11,000,000 (the "Purchase Price"). The Purchase Price was settled in full through the issuance to Solex of a total of 3,000,000 new shares in Aega, each with a nominal value of NOK 1.00, for a subscription price of NOK 3.00 (the "Consideration Shares") and 2,000,000 warrants (the "Warrants"). In addition, Aega has assumed certain of Solex' liabilities limited upwards to NOK 6.1 million (the "Assumed Liabilities"). The Purchase Price is regarded as restructuring cost and will be booked as a non-recurring cost in the first quarter of 2017. In addition, provisions will be made for the Assumed Liabilities, also in the first quarter of 2017.
The Warrants are freely tradable and non-listed warrants, each of which entitles the holder to subscribe for one new share in Aega at an exercise price of NOK 3.10 per share (the "Exercise Price"). The Exercise Price for each Warrant shall at the time of exercise of such Warrant be adjusted downwards on a NOK-for-NOK basis by any dividend per share paid by Aega in excess of an annual dividend of 7% of NOK 3.10 in the period from the issue of the Warrant until the exercise of the Warrant. The Warrants shall be exercisable during exercise periods lasting for four weeks from the date of publication of Aega's annual financial statements for the financial years 2017, 2018, 2019 and 2020, provided, however, that the last exercise period shall end no later than 30 June 2021. Any unexercised Warrants shall expire without any compensation to the holder on 30 June 2021.
60% of the Consideration Shares are subject to lock-up in a 24-month period from the completion of the Solex Transaction.
Completion of the Solex Transaction was subject to certain conditions. All of these conditions were fulfilled before completion, with the exception of a condition related to the completion of a private placement with minimum gross proceeds of NOK 25 million. The latter condition was waived by the Company as a result of the completion of the Private Placement.
16.2 Resolution to issue the Consideration Shares On 27 January 2017, the extraordinary general meeting of Aega passed the following resolution to issue the Consideration Shares and Warrants:
(i) The share capital is increased by NOK 3,000,000, through the issue of 3,000,000 new shares, each with a nominal value of NOK 1.00.
(ii) The subscription price per share is NOK 3.00.
(iii) The new shares shall be subscribed for by Solex AS, with registered address at Matrandvegen 1182, 2210 Granli.
(iv) Subscription for the new shares shall be made on a separate subscription form at the time of completion (the "Closing Date") of the asset purchase agreement between the Company and Solex AS dated 9 December 2016 (the "Agreement").
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(v) The share contribution shall be settled through transfer to the Company of a proportionate part of the assets, rights and obligations to be transferred to the Company pursuant to the Agreement. The transfer shall take place on the Closing Date.
(vi) In addition to the issue of the new shares, the Company shall issue warrants to Solex AS as further described in item 6 of the minutes.
(vii) For a further description of the share contribution and the Agreement, reference is made to the enclosed auditor statement issued pursuant to Sections 10-2, cf. 2-6 of the Norwegian Public Limited Companies Act, and to the board of directors' reasons for the proposed share capital increase.
(viii) The new shares will carry rights in the Company, including the right to dividend, from the time of registration of the share capital increase with the Norwegian Register of Business Enterprises.
(ix) Section 4 of the Company's articles of association is amended to reflect the new share capital and the new number of shares following the share capital increase.
(x) Completion of the share capital increase is conditional upon completion of the Agreement.
(xi) The Company's expenses in connection with the share capital increase are estimated to approximately NOK 50,000.
16.3 The Consideration Shares The share capital increase pertaining to the Consideration Shares was registered in the Norwegian Register of Business Enterprises on 3 January 2017 and issued to Solex in the VPS under a separate ISIN number, being ISIN 001 0781529, pending the publication of this Prospectus and the listing of the Consideration Shares on Oslo Axess.
With effect from the publication of this Prospectus, the Consideration Shares will be registered under the same ISIN as the Company’s other existing Shares, being ISIN NO 001 0626559, and the Consideration Shares will be listed and admitted to trading on Oslo Axess from the same date (being the date hereof).
The Consideration Shares are ordinary Shares in the Company each having a nominal value of NOK 1.00 and were delivered electronically in registered book-entry form in the VPS. The Company’s VPS account operator is DNB Bank ASA, Registrar Department, P.O. Box 1600 Sentrum, 0021 Oslo, Norway.
The Consideration Shares carry full shareholder rights, in all respects equal to the existing Shares of the Company, from the time of registration of the share capital increase pertaining to the Consideration Shares with the Norwegian Register of Business Enterprises on 8 February 2017.
All Shares, including the Consideration Shares, will have voting rights and other rights and obligations which are standard under the Norwegian Public Limited Liability Act, and are governed by Norwegian law. See Section 12 "Corporate information and description of share capital" for further information relating to the Shares, including the Consideration Shares.
16.4 Share capital following the Solex Transaction Following the registration of the share capital increase pertaining to the Solex Transaction with the Norwegian Register of Business Enterprises, the number of issued and outstanding Shares in the Company have been increased by 3,000,000 Shares from 40,882,141 Shares to 43,882,141 Shares, each with a nominal value of NOK 1.00 and the Company’s share capital have been increased by NOK 3,000,000 from NOK 40,882,141 to NOK 43,882,141.
16.5 Dilution The issue of the Consideration Shares resulted in an immediate dilution of approximately 6.8% for the Company's shareholders based on the share capital of the Company after the Private Placement. Assuming exercise of all Warrants in addition to the issuance of the Consideration Shares, the dilutive effect will be approximately 10.9% based on the share capital of the Company after the Private Placement.
16.6 Interests of natural and legal persons involved in the Solex Transaction As of the date of the Prospectus, Solex is a shareholder in Aega (see Section 12.5). Furthermore, Lars-Gøran Dysterud Hansen (strategic advisor to the board of directors in Aega) and Geir Upsaker (board member in Aega) are both
78 shareholders in Solex. Other than that, the Company is not aware of any interests, including conflicting ones, that are material to the Solex Transaction.
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17 ADDITIONAL INFORMATION 17.1 Auditor and advisors The Company’s auditor is PricewaterhouseCoopers AS with business registration number 987 009 713, and business address Dronning Eufemias gate 8, 0191 Oslo, Norway.
Advokatfirmaet Thommessen AS, Haakon VIIs gate 10, 0161, Oslo, Norway, is acting as Norwegian counsel to the Company.
Pioner Kapital AS, Hieronymus Heyerdahls gate 1, 0160, Oslo, Norway, and SpareBank 1 Markets AS, Olav V’s gate 5, 0151 Oslo, Norway, has been acting as Managers for the Company in relation to the Private Placement.
Aabø-Evensen & Co Advokatfirma AS, Karl Johans gate 27, P.O. Box 1789 Vika, 0122 Oslo, Norway, is acting as legal advisor to the Managers in connection with the Private Placement.
17.2 Documents on display For the life of the Prospectus the following documents (or copies thereof) may be inspected at the Company’s offices at Oscars gate 52, 0258 Oslo, Norway during normal business hours from Monday to Friday each week (except public holidays) for a period of twelve months from the date of this Prospectus:
The Company’s Certificate of Incorporation and Articles of Association;
All reports, letters, and other documents, historical financial information, valuations and statements prepared by any expert at the Company’s request any part of which is included or referred to in this Prospectus; and
This Prospectus.
17.3 Incorporation by reference The information incorporated by reference in this Prospectus shall be read in connection with the cross-reference list set out in the table below. Except as provided in this Section, no information is incorporated by reference in this Prospectus.
The Company incorporates by reference the Group's audited financial statements as of and for the years ended 31 December 2015 and 2014, the Group’s unaudited interim financial statements as of the first and fourth quarter of 2016, as well as certain other documents set out below:
Section in Disclosure the requirements Prospectus of the Prospectus Reference document and link
Sections Audited historical Financial Statements 2015: 9, 10 financial http://www.newsweb.no/newsweb/search.do?messageId=399954 Financial Statements 2014: information (Annex XXV, http://www.newsweb.no/newsweb/search.do?messageId=376023 Section 3.1) Section 9 Audit report Auditor’s Report 2015:
(Annex XXV, http://www.newsweb.no/newsweb/search.do?messageId=399954 Section 20.1) Auditor’s Report 2014:
http://www.newsweb.no/newsweb/search.do?messageId=376023 Section 9 Interim financial Interim Financial Statements Q4 2016:
information http://www.newsweb.no/newsweb/search.do?messageId=421423 (Annex XXV,
section 3.2) Section 7 Principal Financial Statements 2015: investments http://www.newsweb.no/newsweb/search.do?messageId=399954
(Annex XXV, Section 20.6.1) Section 7 Principal Interim Financial Statements Q1 2016: investments http://www.newsweb.no/newsweb/search.do?messageId=403207
(Annex XXV, Section 20.6.1)
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18 DEFINITIONS AND GLOSSARY In the Prospectus, the following defined terms have the following meanings:
Articles of Association ...... The Company’s articles of association attached as Appendix A of this Prospectus...... Aega ...... Aega ASA. Acquisition ...... The Company's acquisition of all shares in Yieldco made on 20 January 2016 against a consideration of approximately NOK 75.5 million.
Board of Directors or Board...... The Board of Directors of Aega ASA. Board Members ...... Members of the Board of Directors of Aega ASA. CEFA/AFA ...... Certified European Financial Analyst. CET ...... Central European Time. CEO ...... Chief Executive Officer. CFO ...... Chief Financial Officer. Company ...... Aega ASA...... Corporate Governance Code ...... The Norwegian Code of Practice for Corporate Governance dated 30 October 2014...... DnR ...... The Norwegian Institute of Public Accountants. EEA ...... European Economic Area. EU ...... The European Union...... EUR ...... The lawful currency of the participating member states in the European Union...... EUR/MWh ...... EUR per MWh. EU Prospectus Directive ...... Directive 2003/71/EC of the European Parliament and of the Council of 4 November 2003, and ...... amendments thereto, including the 2010 PD Amending Directive to the extent implemented in the Relevant Member State...... Financial Information ...... The Financial Statements and the Interim Financial Statements together. Financial Statements ...... The audited annual financial statements for the Group as of and for the years ended 31 December 2014 and 2015. FiT ...... Feed-in Tariffs. Forward-looking statements ...... Statements that reflect the Group’s current intentions, beliefs or current expectations concerning, among other things, financial position, operating results, liquidity, prospects, growth, strategies and the industries and markets in which the Group operates. Forward- looking statements are not guarantees of future performance and the Group’s actual financial position, operating results and liquidity, and the development of the industries and markets in which the Group operates, may differ materially from those made in or suggested by the forward-looking statements contained in this Prospectus. General Meeting ...... The general meeting of the shareholders in the Company...... Group ...... The Company taken together with its consolidated subsidiaries...... GSE ...... Gestore dei Servizi Energetici. GW ...... Gigawatt. GWh ...... Gigawatt-hours. GWp ...... Gigawatt-peak. HSE ...... Health, safety and environment. IAS 34 ...... International Accounting Standard 34...... IFRS ...... International Financial Reporting Standards as adopted by the EU...... IGAAP ...... Italian Generally Accepted Accounting Principles. Interim Financial Statements ...... The unaudited interim consolidated financial information for the Group as of and for the three month periods ended 31 March 2015 and 2016.
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IRR ...... Internal rate of return. ISIN ...... International Securities Identification Number. KW ...... Kilowatt. KWh ...... Kilowatt-hours. KWp...... Kilowatt-peak. Listing ...... The listing on Oslo Axess by Aega of the New Shares. M&A ...... Mergers and Acquisitions. Management Agreement ...... The management agreement with Solex AS entered into on 11 April 2016 regarding operations of the solar park portfolio, sourcing of new investments, due diligence and other services related to the solar plant business for the Group. Managers ...... Pioner Kapital AS and Spare Bank 1 Markets AS...... Member States ...... Member states of the EU participating in the European Monetary Union having adopted the Euro as its lawful currency. MW ...... Megawatt. MWh ...... Megawatt-hours. MWp ...... Megawatt-peak...... Private Placement Shares ...... The 4,991,184 new shares in the Company issued in the Private Placement. NGAAP ...... Norwegian Generally Accepted Accounting Principles. NHH ...... Norwegian School of Economics. NOK ...... Norwegian Kroner, the lawful currency of Norway...... NOM-account ...... Nominee account. Non-Norwegian Corporate Shareholders...... Shareholders who are limited liability companies and certain similar corporate entities not resident in Norway for tax purposes. Non-Norwegian Individual Non-Norwegian Shareholders who are individuals. Shareholders......
Solex (previously Aega Solar AS) ... Solex AS.
Non-Norwegian Shareholders ...... Shareholders that are not resident in Norway for tax purposes. Norwegian Individual Shareholders . Shareholders who are individuals resident in Norway for tax purposes. Norwegian Corporate Shareholders . Shareholders who are limited liability companies and certain similar corporate entities resident ...... in Norway for tax purposes. Norwegian FSA ...... The Financial Supervisory Authority of Norway (Nw.: Finanstilsynet)...... Norwegian Public Limited Companies Act ...... Norwegian Public Limited Liability Companies Act of 13 June 1997 No 45...... Oslo Axess ...... A regulated market place operated by Oslo Børs ASA (the “Oslo Stock Exchange”). Norwegian Securities Trading Act.... The Norwegian Securities Trading Act of 28 June 2007, no. 75 (Nw.: verdipapirhandelloven)...... Oslo Stock Exchange ...... Oslo Børs ASA, or, as the context may require, Oslo Børs, a Norwegian regulated stock ...... exchange operated by Oslo Børs ASA. Private Placement ...... The issuance of 4,991,184 New Shares in the Private Placement completed on 19 December 2016
PV ...... Photovoltaic. Prospectus ...... This Prospectus dated 29 March 2017...... PwC ...... PricewaterhouseCoopers AS. SEC ...... The U.S. Securities and Exchange Commission. Share(s) ...... Means the shares of the Company, each with a nominal value of NOK 1, or any one of them, ...... including the New Shares. Small Parks...... Solar parks having a size between 1 MW up to 5 MW.
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SPP ...... Solar power plant. SPV ...... Single purpose vehicles. SWAP ...... A derivative contract through which two parties exchange financial instruments. TWh ...... Terrawatt-hours. VAT ...... Value-added tax. VPS or Verdipapirsentralen ...... The Norwegian Central Securities Depository (Nw.: Verdipapirsentralen)...... VPS account ...... An account with VPS for the registration of holdings of securities...... Yieldco ...... Aega Yieldco AS.
APPENDIX A:
ARTICLES OF ASSOCIATION
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VEDTEKTER FOR AEGA ASA Oppdatert 27. januar 2017 §1 Firma Selskapets navn er Aega ASA. Selskapet er et allmennaksjeselskap.
§2 Forretningskontor Selskapets forretningskontor er i Oslo kommune.
§3 Selskapets virksomhet Selskapets formål er investeringer i og eierskap av selskaper innenfor solenergiindustrien og alt som står i sammenheng med dette. Selskapet kan også drive handel med finansielle instrumenter, hovedsakelig aksjer, egenkapitalbevis og derivater knyttet til disse, samt virksomhet i tilknytning til dette. §4 Aksjekapital og aksjer Selskapets aksjekapital er kr. 43 882 141 fordelt på 43 882 141 aksjer, hver pålydende kr. 1. Aksjene er registrert i Verdipapirsentralen.
§5 Styre Selskapets styre skal bestå av tre til åtte medlemmer, etter generalforsamlingens nærmere beslutning.
§6 Signatur Selskapets firma tegnes av styrets leder og daglig leder hver for seg.
§7 Valgkomite
Selskapet skal ha en valgkomité bestående av tre medlemmer som velges av generalforsamlingen for tre år av gangen. Valgkomiteen skal maksimalt ha ett medlem som også er medlem av selskapets styre og skal ikke inneholde representanter fra selskapets daglige ledelse. Valgkomiteens oppgave er å avgi innstilling til generalforsamlingen om valg av aksjonærvalgte medlemmer til styret, styreleder, nestleder, samt honorar til styremedlemmene. Innstillingen skal avgis til styrets leder senest tre uker før avholdelse av generalforsamlingen.
§8 Generalforsamling Den ordinære generalforsamling skal behandle og avgjøre: 1. Godkjennelse av årsregnskapet og årsberetningen, herunder utdeling av utbytte. 2. Andre saker som i henhold til loven eller vedtektene hører under generalforsamlingen.
§9 Elektronisk kommunikasjon Selskapet kan benytte elektronisk kommunikasjon når det skal gi meldinger, varsler, informasjon, dokumenter, underretninger og liknende etter aksjeloven til en aksjeeier.
§10 Dokumenter lagt ut på selskapets internettside Dokumenter som gjelder saker som skal behandles på generalforsamlingen og som er gjort tilgengelig for aksjeeierne på selskapets internett side, vil ikke bli tilsendt aksje eierne.
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AEGA ASA Oscars gate 52 0258 Oslo
Managers Pioner Kapital AS Hieronymus Heyerdahls gate 1 0160 Oslo Norway
SpareBank 1 Markets Olav Vs gate 5 P.O. Box 1398 Vika 0114 Oslo Norway
Legal Adviser to the Company (as to Norwegian law) Advokatfirmaet Thommessen AS Haakon VIIs gate 10 N-0161 Oslo Norway
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